Supreme Court to Review Ninth Circuit Decision Requiring Stormwater Permits for Runoff from Logging Roads

The Supreme Court this week agreed to review a controversial Clean Water Act (CWA) case having to do with stormwater runoff from logging roads. Northwest Environmental Defense Center v. Brown (NEDC)[1] is another environmental case coming out of the Ninth Circuit—a circuit that the Supreme Court has often reversed on environmental issues in recent years, including this term’s Sackett v. EPA decision striking down a ban on pre-enforcement review under the CWA. See Unanimous Supreme Court Tells EPA Its Orders Can Be Appealed. This time, the Supreme Court will have before it a Ninth Circuit ruling that requires public and private forest land owners and timber companies within much of the West to obtain permits for stormwater discharged from ditches and culverts. See Ninth Circuit Reissues Opinion Requiring NPDES Permits for Stormwater Discharges from Logging Roads. The Supreme Court granted review over the objection of environmental groups and the Obama Administration, which filed an amicus brief—at the Court’s request—that asked the Court not to review the decision. In accepting review, the Supreme Court rejected the United States’ argument that EPA could remedy the Ninth Circuit’s decision through the regulatory process or that Congress could do the same through legislation. In light of the Court’s pending review and potential reversal of the Ninth Circuit, whether and to what degree EPA elects to move forward with its planned rulemaking remains to be seen.

Background

The CWA prohibits the discharge of a “pollutant” into waters of the United States from a “point source” without a permit, such as a National Pollutant Discharge Elimination System (NPDES) permit.[2] The CWA defines a “point source” as “any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, [or] conduit … from which pollutants are or may be discharged,”[3] but does not define a “nonpoint source.”

Section 402(p) of the CWA, added to the CWA in 1987, includes a phased approach for addressing stormwater discharges. Phase I covers enumerated sources of stormwater pollution, including stormwater “associated with industrial activity”[4]—a term that the CWA does not define. Under EPA’s regulations, that term includes discharges from “immediate access roads … used or traveled by carriers of raw materials, manufactured products, waste material, or by-products used or created by the facility.”[5] The Phase II stormwater regulations apply to any additional stormwater discharges that EPA designates to protect water quality. For such designated discharges, EPA need not require NPDES permits, but must “establish a comprehensive program” that “may include performance standards, guidelines, guidance, and management practices and treatment requirements, as appropriate.”[6]

EPA has excluded runoff from forest roads from the NPDES program almost ever since Congress passed the CWA. After refining the Silvicultural Rule in response to court action, the Silvicultural Rule changed little for approximately thirty-five years before the Ninth Circuit’s decision. The current language of the Silvicultural Rule limits “silvicultural point sources” to “rock crushing, gravel washing, log sorting, or log storage facilities which are operated in connection with silvicultural activities and from which pollutants are discharged into waters of the United States.”[7] Falling outside the definition are “non-point source silvicultural activities such as nursery operations, site preparation, reforestation and subsequent cultural treatment, thinning, prescribed burning, pest and fire control, harvesting operations, surface drainage, or road construction and maintenance from which there is natural runoff.”[8]

The NEDC Decision

NEDC involves two state-owned logging roads that Oregon allowed timber companies to use to access logging sites and to haul timber under contracts with Oregon. The timber sales contracts require the companies to maintain the roads and their associated stormwater collection systems, which are ditches, culverts, and channels that collect and convey stormwater runoff from the roads to tributary streams and adjacent rivers. An environmental group, NEDC, brought a citizen suit under the CWA, alleging that sediment discharges in stormwater from these roads negatively impact aquatic life, such as salmon and trout, and require NPDES permits. The District Court of Oregon dismissed NEDC’s suit, holding that the Silvicultural Rule exempted the discharges from the NPDES program. According to the district court, the road systems at issue were not “point sources,” because “[t]he road/ditch/culvert system and timber hauling on it is a traditional dispersed activity from which pollution flowing into the water cannot be traced to single discrete sources.”[9]

NEDC appealed the district court decision, arguing that the unpermitted stormwater discharges violate the CWA, despite the Silvicultural Rule. The Ninth Circuit also addressed a second issue that the district court elected not to: whether and how the 1987 stormwater amendments, and EPA’s regulations implementing those amendments, apply to stormwater runoff from logging roads. The Ninth Circuit agreed with NEDC, holding that discharges from the logging roads require compliance with an NPDES permit. It further held that the Silvicultural Rule does not and cannot, consistent with the CWA, exempt runoff that is collected from logging roads and discharged from a ditch or culvert to jurisdictional waters. The Ninth Circuit reviewed the statutory definition of “point source,” case law interpreting the distinction between point and nonpoint sources, and the genesis and history of the Silvicultural Rule. It also defined nonpoint source pollution, based on Ninth Circuit precedent, as “the type of pollution that arises from many dispersed activities over large areas, and is not traceable to any single discrete source.”[10] Because “runoff is not inherently a nonpoint or a point source of pollution,” according to the court, the distinction between point and nonpoint source discharges turns not on the runoff itself, but on whether stormwater “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).”[11]

In the court’s view, EPA’s intent in the Silvicultural Rule was to focus on the “source of the pollutant” and not the mechanism of discharge, where “any natural runoff containing pollutants” from silvicultural activities is exempt “from the definition of point source, irrespective of whether, and the manner in which, the runoff is collected, channeled, and discharged into” jurisdictional water.[12] This approach, the court opined, directly conflicts with the statutory definition of “point source” under the CWA, and is therefore invalid. Instead of striking down the Silvicultural Rule, however, the court determined that the Rule is subject to a second interpretation that is consistent with the CWA, even though it neither “reflect[s] the intent of EPA” nor exempts the discharges at issue in the case. Under the latter interpretation, the Silvicultural Rule “exempts natural runoff from silvicultural activities … , but only as long as the ‘natural runoff’ remains natural. That is, the exemption ceases to exist as soon as the natural runoff is channeled and controlled in some systematic way through a ‘discernible, confined and discrete conveyance’ and discharged into” jurisdictional waters.[13]

The court then addressed the impact of the CWA’s 1987 amendments and EPA’s regulations implementing those amendments. The court acknowledged that it is “within the discretion of EPA to promulgate Phase II regulations requiring, or not requiring, permits for” discharges from relatively de minimis sources, but stated that EPA lacks discretion with respect to the entities that fall within the Phase I regulations.[14] Because Congress expressly required EPA to promulgate Phase I regulations to address “discharges associated with industrial activity,” the court held that, if silvicultural activity is “industrial in nature,” § 402(p) “requires that discharges from such activity obtain NPDES permits.”[15]

After reviewing EPA’s Phase I regulations, the court concluded that stormwater discharges from logging roads fall within the scope of Phase I as “storm water discharge[s] associated with industrial activity,” and therefore require compliance with the NPDES program. The court based this ruling on a provision of EPA’s regulations that specifies broad Standard Industrial Code (SIC) categories of industries considered “industrial activities,” one of which includes “logging,” defined as “establishments primarily engaged in cutting timber and in producing … primary forest or wood raw materials … in the field.”[16] The court also noted that EPA had defined “stormwater discharge associated with industrial activity” as including “immediate access roads … used or traveled by carriers of raw materials, manufactured products, waste material, or by-products used or created by the facility.”[17] According to the court, and relying on EPA’s preamble to the Phase I rule, logging roads qualify as “immediate access roads,” because they are “roads which are exclusively or primarily dedicated for use by the industrial facility.”[18]

Second, logging roads are “primarily dedicated” to use by the logging companies, because, although logging roads are “often used for recreation … that is not their primary use. Logging companies not only build and maintain the roads and their drainage systems pursuant to contracts with the State. Logging is also the roads’ sine qua non: If there were no logging, there would be no logging roads.”[19] Finally, the court concluded that the Phase I rule defines “industrial activity” broadly enough to encompass other non-traditional sites that are directly related to an industrial process, including “immediate access roads.”[20] Despite EPA’s pending obligation from a prior case to determine whether the discharges should be included in EPA’s Phase II stormwater regulations, the court reiterated that logging road runoff is subject to the Phase I regulations. The court opined that EPA should be able to “effectively and relatively expeditiously” adapt the “closely analogous NPDES permitting process for stormwater runoff from other kinds of roads” to a general permit for stormwater discharges from logging roads.[21]

Congressional Action

Shortly after the Ninth Circuit issued its amended decision in NEDC, bipartisan groups of legislators in the Senate and the House introduced bills to codify the Silvicultural Rule as an amendment to the Clean Water Act.[22] See Opposition Mounts To Ninth Circuit Ruling Requiring NPDES Permit For Stormwater Runoff From Forest Roads. Congress has not passed these bills, but it did issue a moratorium on implementation of NEDC until September 30, 2012.[23] Legislation to permanently codify the Silvicultural Rule is still pending in Congress.

Appeal to the Supreme Court

While Congress considered amendments to the CWA to permanently resolve the Ninth Circuit’s decision in NEDC, the defendants and intervenor-defendants, along with various amici including states and industry groups, filed petitions for a writ of certiorari with the Supreme Court.[24] The petitions focused on four issues: (1) the Ninth Circuit did not give required Chevron deference to EPA’s interpretation of its own regulations; (2) the Ninth Circuit’s decision conflicts with rulings from other circuit courts, which have affirmed EPA’s treatment of channeled forest road runoff as a nonpoint source that is not subject to NPDES permitting; (3) the suit should have been viewed as a direct challenge to the Silvicultural Rule itself, the time for which is long passed under the CWA’s 120 day statute of limitations; and (4) the impacts of NEDC on parties that own, manage, and use forest roads present issues of great national importance.

NEDC’s response to the petitions argued that: (1) no direct circuit conflict exists, because no other court has directly assessed whether logging roads qualify as point sources under the Phase I regulations; (2) the Ninth Circuit did not invalidate EPA action that would run afoul of the CWA’s statute of limitations; (3) the Ninth Circuit gave proper deference to EPA’s own regulations and the CWA; and (4) the decision does not present issues of great national importance, because NPDES permitting requirements for logging roads will merely supplement, not displace, local regulations for logging roads, a process that allegedly will not be unduly burdensome.

Instead of deciding whether to grant certiorari in December 2011, the Supreme Court invited the Solicitor General to file a brief expressing the views of the United States. The United States took that opportunity to attempt to address the Ninth Circuit’s decision through the regulatory process and, based largely on that effort, to submit a brief to the Supreme Court encouraging the denial of certiorari.

EPA Notice of Intended Rulemaking

On May 23, 2012, EPA issued a notice stating its intent to “expeditiously” propose revisions to its Phase I stormwater regulations “to specify that stormwater discharges from logging roads are not stormwater discharges ‘associated with industrial activity.’”[25] The notice also states that EPA is “considering designating a subset of stormwater discharges from forest roads for appropriate action” under its Phase II rulemaking authority. EPA’s notice does not choreograph how it intends to revise its Phase I regulations in concert with the Ninth Circuit’s interpretation of the CWA or EPA’s current regulations, nor does it state whether or how EPA will address stormwater discharges from forest roads within the Phase II regulations. Instead, the notice merely states that EPA will take steps to address NEDC and the remand under an earlier Ninth Circuit decision,[26] by “remov[ing] any obligation for an owner or operator of a logging road that has discharges of stormwater to waters of the United States to seek coverage of the discharge under” the NPDES program. EPA states that it intends to promulgate a proposed rule before the Congressional moratorium expires at the end of September.

The United States’ amicus brief to the Supreme Court argued that the Ninth Circuit had jurisdiction over the plaintiff’s claims, because “the dispute between the parties concerns the proper interpretation, rather than the validity, of the EPA regulations at issue here.”[27] The United States also asserted that the Ninth Circuit erred by failing to defer to EPA’s interpretation of the Silvicultural Rule and the Phase I stormwater regulations, but nonetheless encouraged the Supreme Court to decline review the Ninth Circuit’s decision because: (1) no circuit court conflict exists on the questions presented; and (2) EPA and Congress are already taking steps to remedy the burdens presented by the decision.

On the latter point, the United States asserted that:

[W]hile the court of appeals construed EPA’s current Phase I industrial storwmater regulation to require NPDES permits for channeled stormwater discharges associated with logging roads, the court did not hold that the CWA compels that result. Congress has temporarily barred EPA from implementing the court of appeals’ decision, and EPA has announced its intention to amend expeditiously its Phase I regulation to make clear that discharges of the sort at issue here do not require NPDES permits. Those developments address petitioners’ concerns about the practical burdens for writs of certiorari that the court’s ruling could entail.[28]

EPA’s revisions to its regulations, according to the United States, “would render moot petitioners’ objections to the court of appeals’ conclusion that such discharges are subject to NPDES permitting requirements under the current regulatory scheme,” and potential grievances with “the ultimate outcome of EPA’s rulemaking process” could be addressed through judicial review.[29]

Petitioners and respondents filed supplemental briefs within days of the United States’ amicus brief. The petitioners argued that review is warranted because, even if EPA indeed issues a proposed revision to its Phase I regulations before the Congressional moratorium expires, an eventuality that is uncertain, EPA cannot promulgate a file rule before the Congressional moratorium expires. As a result, the petitioners argued that they are necessarily exposed to considerable hardship, and that they cannot rely on Congress to address that hardship given that legislation to codify the Silvicultural Rule has been stalled for nearly a year. Moreover, the petitioners argued that allowing the Ninth Circuit’s decision to stand would require EPA to promulgate new rules around a decision that was wrongly decided and would expose the defendants in NEDC to penalties and the plaintiff’s attorney fees. The respondents took issue with the United States’ assertion that the Ninth Circuit erred by refusing to defer to EPA’s interpretation of its regulations, but agreed with the United States’ assertion that Supreme Court review is unwarranted.

Despite these arguments, the Supreme Court granted both petitions for certiorari, in Georgia-Pacific West, et. al. v. NEDC and Decker, et al v. NEDC, consolidated them, and allowed a total of an hour for oral argument, which will be set for next term.

For more information regarding this article, please contact Meline MacCurdy or any other member of Marten Law’s Water Quality practice group.