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By Andrew H. Perellis, Patrick D. Joyce, and Craig B. Simonsen

US Supreme Court Capitol Hill Daytime Washington DCSeyfarth Synopsis: The Supreme Court decided that Army Corps’ jurisdictional determinations are judicially reviewable. This decision leaves open the question of whether other types of administrative decisions are immediately judicially reviewable.

In a significant victory for owners of private property, the Supreme Court of the United States (SCOTUS) decided this week that an Army Corps of Engineers (Corps) jurisdictional determination (JD) is a final agency action judicially reviewable under the Administrative Procedure Act (APA).  U.S. Army Corps of Engineers v. Hawkes Co., Inc., et al., No. 15-290, 578 U.S. ____ (May 31, 2016).

The issue presented was whether a so-called “approved” jurisdictional determination — the government’s determination that a wetland is regulated under the Clean Water Act (CWA) thereby requiring a permit to dredge or fill — is immediately reviewable. The Hawkes decision builds on the holding of Sackett v. EPA, 132 S. Ct. 1367 (2012) (see our earlier blog on the Sackett decision) where SCOTUS concluded that an EPA compliance order issued under the CWA requiring that a developer cease its filling activity of an allegedly regulated wetland was judicially reviewable. SCOTUS rejected the Government’s contention that the landowner has to await EPA’s judicial enforcement of that order.

Following Sackett, the Circuit Courts of Appeal have split as to whether a landowner receiving a JD finding the wetland to be CWA-regulated is final and reviewable — with the Eighth Circuit holding yes, and the Fifth Circuit holding no.

In Hawkes, the plaintiffs sought to mine peat from wetland property. The Corps upset that plan when it issued an approved JD that the property constituted “waters of the United States” (WOTUS), requiring the plaintiffs to obtain a permit to discharge dredged or fill materials into these “navigable waters.” Approved JDs present a definitive statement that waters of the United States are, or are not, present. The Corps also issues “preliminary” JDs that only tell a landowner that waters of the United States “may” be present. Preliminary JDs were not at issue in this case. An approved JD is binding upon the Corps and EPA. For example, where the JD concludes that a CWA-regulated wetland is not involved, it provides the landowner with a “safe-harbor” for five years, under which it is free to develop its property without need to obtain a permit. For this reason, SCOTUS concluded that the JD affects the plaintiffs’ rights and obligations and has legal consequences, making it reviewable.

This SCOTUS determination could have heightened importance in the context of the EPA’s and the Corps’ recent release of the Final Clean Water Rule: Definition of “Waters of the United States.” We blogged about this new rule when it was published. The new WOTUS rule will substantially increase the number of potential wetlands, making a challenge to the Corps’ Jurisdictional Determinations more likely now that SCOTUS has decided that they are judicially reviewable.

The Hawkes decision also leaves open questions of whether other types of administrative decisions are immediately judicially reviewable. In a related Law360 Expert Analysis (Water Case Shows Justices Warm To Review Of Fed. Agencies), Andy Perellis notes that “there is potentially a universe of agency actions such as guidance documents or opinion letters that in the past have evaded judicial review that may be reviewable because those agency determinations have immediate consequences.”

Supreme CourtSeyfarth Partner Andrew H. Perellis is quoted in this Law360 expert analysis, High Court Water Case Could Put Target On Agencies’ Backs (March 29, 2016).

The pending Supreme Court case, U.S. Army Corps of Engineers v. Hawkes Co. Inc. et al., no. 15-290, involves what constitutes a final agency action reviewable under the Administrative Procedure Act. We had previously blogged about this appeal, and its relation to Sackett v. EPA, 132 S. Ct. 1367 (2012). See our earlier blog on the Sackett decision. The case pertains to whether a “jurisdictional determination” regarding a wetland regulated by section 404 of the Clean Water Act is immediately reviewable in court. It is a follow-up case to the Supreme Court’s 2012 Sackett decision holding at a compliance order issued under Section 404 is immediately reviewable.

The Law360 article notes that “landowners and the U.S. Army Corps of Engineers will square off Wednesday at the U.S. Supreme Court in a test of when exactly a party may challenge the Corps’ determination that it has jurisdiction over a wetland — a case that could open government agency decisions up to more challenges across the board.”

In the analysis, Perellis concludes that “one of the key considerations for the high court will be to what extent there are real, tangible consequences in terms of what the property owner can or cannot do with a property following the issuance of a jurisdictional determination.”

By Andrew H. Perellis, Patrick D. Joyce, and Craig B. Simonsen

Supreme CourtThe Supreme Court of the United States (SCOTUS) agreed on Friday to review an important Clean Water Act (CWA) decision issued by the Eighth Circuit in Hawkes Co., Inc., et al. v. U.S. Army Corps of Engineers, No. 13-3067 (April 10, 2015).

The issue presented for SCOTUS is whether an Approved Jurisdictional Determination — the first step in the wetlands permitting process — is immediately reviewable. The Supreme Court showed similar interest in  Sackett v. EPA, 132 S. Ct. 1367 (2012). See our earlier blog on the Sackett decision.  At issue in Sackett was an EPA compliance order issued under the CWA requiring that the developer cease its filling activity of an allegedly regulated wetland. Later, rather than sooner, judicial review can leave the landowner open to considerable expenses.

In Sackett, SCOTUS found the compliance order to be reviewable once issued, so that the landowner did not have to await EPA’s judicial enforcement of that order. Following Sackett, the courts have split as to whether  an Approved Jurisdictional Determination is similarly reviewable — with the Eighth Circuit holding yes, and the Fifth Circuit holding no.

In Hawkes, the plaintiff sought to mine peat from wetland property. The U.S. Army Corps of Engineers (Corps) upset that business plan when it issued an Approved Jurisdictional Determination that the property constituted “waters of the United States” (WOTUS), and therefore the company was  required to obtain a permit to discharge dredged or fill materials into these “navigable waters.”

Review of the Approved Jurisdictional Determination was brought before the District Court. The District Court concluded that an Approved Jurisdictional Determination, although the consummation of the Corps’ decisionmaking process, was not a “final agency action” subject to judicial review within the meaning of the Administrative Procedure Act, 5 U.S.C. § 704. While the appeal of that decision was pending before the Eighth Circuit, a panel of the Fifth Circuit reached a similar conclusion. Belle Co., LLC v. U.S. Army Corps of Engineers, 761 F.3d 383 (5th Cir. 2014), cert. denied, 83 U.S.L.W. 3291 (U.S. Mar. 23, 2015) (No. 14-493).

The Eighth Circuit concluded that the District Court (as well as the Fifth Circuit in Belle) “misapplied the Supreme Court’s decision in Sackett v. EPA, 132 S. Ct. 1367 (2012),” and reversed the District Court opinion.

The SCOTUS determination could have heightened importance in the context of the EPA and the Corps recent release of its Final Clean Water Rule: Definition of “Waters of the United States.” We had blogged about the new rule when it was published. The new WOTUS rule will substantially increase the number of potential wetlands, making challenges to the Corps’ Approved Jurisdictional Determinations more likely if SCOTUS determines that such a determination is judicially reviewable.

By Patrick D. Joyce, Philip L. Comella, and Craig B. Simonsen

iStock_000021343324_MediumThe U.S. Environmental Protection Agency last week finalized its rule to “modernize” Clean Water Act (CWA) regulatory reporting requirements for municipalities, industries, and other facilities.

According to the Agency’s news release the final rule will require regulated entities and state and federal regulators to “use existing, available information technology to electronically report data required by the National Pollutant Discharge Elimination System (NPDES) program instead of filing written paper reports.” EPA suggests that once the rule is fully implemented, the 46 states and other U.S. territories that are authorized to administer the NPDES program will collectively save about $22.6 million a year as a result of switching from paper to electronic reporting.

As part of the final rule the EPA will make facility-specific information, like inspection and enforcement history, pollutant monitoring results, and other data required by NPDES permits, accessible to the public through EPA’s website. Cynthia Giles, the Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance, indicated that “electronic reporting will give the public full transparency into water pollution sources, save millions of dollars, and lead to better water quality in American communities.”

During the rulemaking process, the EPA had held over 50 webinars and meetings to discuss the proposed rule. NPDES Electronic Reporting Rule, 78 Fed. Reg. 46006 (July 30, 2013). In response to state feedback, the final rule will provide “more flexibility for implementation,” providing more time for the transition from paper to electronic reporting, and more flexibility in how states can grant electronic reporting waivers to facilities.

Most facilities subject to effluent monitoring reporting requirements will be required to start submitting data electronically one year following the effective date of the final rule. A second phase will incorporate electronic reporting for other Clean Water Act reports such as performance status reports for municipal urban stormwater programs, controls on industrial discharges to local sewage treatment plants, and sewer overflows. Also in response to comments and suggestions from states, EPA is providing states with more time to electronically collect, manage, and share this data – up to five years instead of two years as initially proposed.

As indicated in the Agency’s proposed rule, electronic reporting has already been implemented in some states, and early findings showed improved data quality and data availability with reduced costs.

For municipalities, industries, and other facilities, as the Agency noted in its release, this rule will give the public “full transparency” into water pollution sources. Now would be a good time to consider your facility and the reporting that you have been doing. Will electronic filing make a difference to you in terms of time spent reporting or accessibility of reports to the public? Does it matter if the filed information is readily and more easily accessible to the public? Thinking about these questions before the new rule is implemented may cause you to think about changes in the way “things have always been done.” Your Seyfarth Shaw attorney is always available to answer any pressing questions you may have regarding this new rule.

By Patrick D. Joyce and Craig B. Simonsen

Blog - Fracking WaterThe U.S. Environmental Protection Agency released a draft assessment study last week showing that hydraulic fracturing (“fracking”) activities in the U.S. may have potential impacts on the water lifecycle, affecting drinking water resources. 80 Fed. Reg. 32111 (June 5, 2015).

The report, Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources (External Review Draft), prepared at the request of Congress, follows the water used for fracking through the entire water cycle from water acquisition, to chemical mixing at the well pad site, to well injection of fracking fluids, to the collection of fracking wastewater (including flowback and produced water), and finally, to wastewater treatment and disposal. Dr. Thomas A. Burke, EPA’s Science Advisor and Deputy Assistant Administrator of EPA’s Office of Research and Development, noted that “EPA’s draft assessment will give state regulators, tribes and local communities and industry around the country a critical resource to identify how best to protect public health and their drinking water resources.”

While EPA’s study, which included over 950 sources of information, found specific instances where well integrity and waste water management related to fracking activities directly impacted drinking water resources, the number of instances found were “small compared to the large number of hydraulically fractured wells across the country.”

The study identified specific vulnerabilities to drinking water resources including:

  • Water withdrawals in areas with low water availability;
  • Fracking conducted directly into formations containing drinking water resources;
  • Inadequately cased or cemented wells resulting in below ground migration of gases and liquids;
  • Inadequately treated wastewater discharged into drinking water resources; and
  • Spills of fracking fluids and fracking wastewater, including flowback and produced water.

The study noted that while there were few instances of drinking water contamination cause by fracking, this may be due to a lack of pre- and post-fracturing data on water quality and the inaccessibility of some information on fracking activities.

The draft study will be finalized after review by the Science Advisory Board and public review and comment. Public teleconferences are scheduled on the draft report, on September 30, 2015, October 1, 2015, and October 19, 2015. Public face-to-face meetings will be held on October 28, 2015, October 29, 2015, and October 30, 2015.

Public written statements for the teleconferences or for the face-to-face meetings should be received by the EPA Docket,  No. EPA–HQ–OA–2015–0245, by August 28, 2015.

By Jeryl L. Olson, Andrew H. Perellis and Patrick D. Joyce

The EPA and Army Corps of Engineers recently released its Final Clean Water Rule: Definition of “Waters of the United States.”

We had previously blogged about the Agency’s draft of the proposed rule that was distributed in November, 2013 as well as a “clarification” of the proposed rule distributed in March, 2014.

EPA claims that the Final Rule does not create any new or different regulatory requirements and is only a “definitional rule” that clarifies the scope of the “waters of the United States” under the Clean Water Act in light of the U.S. Supreme Court cases in U.S. v. Riverside Bayview Homes, 474 U.S. 121 (1985), Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (SWANCC), 531 U.S. 159 (2001), and Rapanos v. United States (Rapanos), 547 U.S. 715 (2006).  Many commentators and experienced environmental practitioners, however, believe that the rule expands federal jurisdiction.  Challenges to the rule are expected, and the courts will have another say in determining the extent to which federal jurisdiction can extend to “waters,” including wetlands and ephemeral streams that are isolated, or otherwise not directly adjacent to what is considered to be a traditional navigable water or tributary to a traditional navigable water.

The Final Rule identifies three basic categories of jurisdictional waters (“the Big Three”) for which the scope of federal jurisdiction largely is not in dispute. These include:

  • Traditional navigable waters
  • Interstate waters
  • The territorial seas

Additionally, tributaries to the above, and wetlands adjacent to either tributaries or to the Big Three are considered to be regulated waters of the United States.

In addition, the Final Rule identifies a category of waters subject to case-specific analysis to determine whether they are jurisdictional.  The following six types of waters are jurisdictional if the satisfy the “significant nexus” test and therefore “significantly affect the chemical, physical, or biological integrity of traditional navigable waters, interstate waters, or the territorial seas in the region:”

  • Prairie potholes
  • Carolina and Delmarva bays
  • Pocosins
  • Western vernal pools in California
  • Texas coastal prairie wetlands
  • Waters within the 100-year flood plain and that are within 4,000 feet of the tide line or the ordinary high water mark of a traditional navigable water, interstate water, the territorial seas, impoundments, or covered tributary (“similarly situated waters”)

Finally, the Final Rule identifies the following waters that are specifically excluded from jurisdiction:

  • Waste treatment systems and wastewater recycling structures on dry land
  • Prior converted cropland
  • Ditches with ephemeral or intermittent flow that are not a relocated tributary or excavated in a tributary and ditches that do not flow into another water
  • Irrigated lands that revert to dry land
  • Artificial lakes such as stock watering ponds, irrigation ponds, settling basins, rice fields, log ponds, and cooling ponds and artificial reflecting pools or swimming pools on dry land
  • Depressions incidental to mining or construction that may become filled with water
  • Erosional features, including gullies, rills, and ephemeral features such as ephemeral streams that do not have a bed and banks and ordinary high water mark
  • Puddles
  • Groundwater
  • Stormwater control features constructed to convey, treat, or store stormwater on dry land

The final rule differs from the proposed rule in some respects, three of which are noted below.

First, the proposed rule defined “floodplain” and “riparian area” in very scientific terms.  The final rule abandons this approach.  Instead, EPA uses a 100-foot measure from the ordinary high water mark in lieu of the term “riparian area.” Also, instead of just using the term “floodplain,” EPA now defines adjacent waters as being a maximum of 1,500 feet from the jurisdictional water and within the FEMA 100-year floodplain.

Second, unlike the proposed rule, the scope of the case-by-case significant nexus analysis now has a geographic limit.  Under the final rule, to be potentially subject to regulation, the water must be within 4,000 feet of the ordinary high water mark of a tributary and within the FEMA 100-year floodplain.

Third, the final rule clarifies the scope of regulation over ditches.  As proposed, a ditch is somewhat more narrowly regulated, and is jurisdictional only where it is (1) an ephemeral or intermittent ditch excavated in a tributary or constructed in order to relocate a tributary or (2) an intermittent ditch that drains wetlands directly into another jurisdictional water.

The final rule is complex and the regulated community should seek legal advice in determining how the new rule may apply in particular situations.

By Andrew H. Perellis and Craig B. Simonsen

In another proposal aimed at small business, the U.S. Environmental Protection Agency has just proposed a rule for Effluent Limitations Guidelines and Standards for the Dental Category. 79 Fed. Reg. 63258 (October 22, 2014). The rule will add more federal compliance costs and potential local treatment facility user fees to already tight dental office budgets.

The EPA proposed technology-based pretreatment standards under the Clean Water Act will be for discharges of pollutants into publicly owned treatment works (POTWs) from existing and new dental practices that discharge dental amalgam. Dental amalgam is a mixture of metals, consisting of liquid mercury and a powdered alloy composed of silver, tin, and copper. Approximately fifty percent of dental amalgam is elemental mercury by weight. Dental amalgam is a dental filling material used to fill cavities caused by tooth decay. It has been used for more than 150 years in hundreds of millions of patients.

EPA estimates there are approximately 160,000 dentists working in over 120,000 dental offices who use or remove amalgam in the United States – “almost all of whom discharge their wastewater exclusively to POTWs.” According to the EPA news release, “this is a common sense rule that calls for capturing mercury at a relatively low cost before it is dispersed into the POTW.”

Specifically the rule would require dentists to cut their dental amalgam discharges to a level achievable through the use of the “best available technology,” known as amalgam separators, and the use of other Best Management Practices. Amalgam separators are devices designed to remove amalgam waste particles from dental office wastewater.

As proposed the rule would allow dentists to demonstrate compliance by installing, operating and maintaining amalgam separators. The rule also provides that dental practices whose existing separators do not remove the percentage of amalgam in the proposed requirements as meeting the proposed requirements for the life of the existing separator. The rule also proposes to limit dental dischargers’ reporting requirements to annual certification and recordkeeping in lieu of wastewater monitoring. EPA estimates the annual cost of the proposed rule would be $44 to $49 million.

In response to the proposed rule the American Dental Association said that the “the Association has consulted with the EPA as it developed the rule and supports a reasonable national pretreatment standard for amalgam waste so long as it is not unduly burdensome on dental professionals.” ADA News Release, September 26, 2014.

A public hearing on the proposed rule is scheduled for November 10, 2014, at 1 p.m. ET, in the William J. Clinton East Building, Room 1153, 1201 Constitution Avenue NW., Washington, DC. Comments may be submitted to Docket No. EPA–HQ–OW–2014–0693.

For our readers with California facilities and interests, Patrick D. Joyce has prepared a Management Alert on California’s new Industrial Stormwater Permit (2014 General Permit), which will apply on and after July 1, 2015. Industrial General Permit, 2014-0057-DWQ.

The California State Water Resources Control Board’s newly adopted industrial stormwater permit regime includes a broader array of industrial facilities not previously covered, increases sampling and monitoring requirements, and implements new Best Management Practices.  Due to the complexity and breadth of the new 2014 General Permit, affected facilities should consider consulting with environmental counsel and a stormwater consultant for further guidance.

Checkout the full Management Alert for complete details.

By Kevin A. Fritz and Craig B. Simonsen

EPA has just announced its Final 2012 and Preliminary 2014 Effluent Guidelines Program Plans, EPA-820-R-14-001 (September 2014). The Plans announce both final decisions the EPA is making on the control of industrial wastewater discharges, and its proposed “new actions for the future.”

The Clean Water Act requires the EPA to biennially publish a plan that establishes a schedule for (1) the annual review and revision of the Agency’s existing effluent limitation guidelines, (2) the identification of any new industrial categories selected for an effluent guideline rulemaking, and (3) to provide a schedule for new rulemaking. This year the EPA is looking particularly at the petroleum refining, oil and gas extraction, metal finishing, and nanomaterials industries.

The Agency announced that it will initiate a detailed study of the petroleum refining industry because of “potential pollutant discharge issues related primarily to metals.” The EPA’s continued category review of petroleum refining (40 CFR Part 419) toxic weighted discharges and review of new and revised air regulations indicated that the industries implementation of wet air-pollution controls, as well as a changes in feedstock, “may result in an increased discharge of metals from petroleum refineries, potentially at concentrations above treatable levels.”

The EPA will also prepare a detailed study of centralized waste treatment (“CWT”) facilities that accept oil and gas extraction wastewaters. The EPA seeks to determine if CWTs provide adequate treatment for these wastewaters that, under the current regulations, “may not provide adequate controls for the oil and gas extraction wastewaters.”

The EPA will continue its Preliminary Category Review of metal finishing (40 CFR Part 433), initiated in 2012.  In a review of the Targeted National Sewage Sludge Survey data, the Agency found that these facilities may be “potentially discharging high concentrations of metals, particularly chromium, nickel, and zinc, to publically owned treatment works.”

The Agency will also prepare a report on a methodology and interim findings of its investigation into the environmental toxicity and industrial wastewater discharge of nanomaterials. In support of that investigation, the EPA requests public comments and any information or data available on the “wastewater hazards and discharges associated with the manufacture of nanomaterials and their use in manufacturing or formulating other products.”

Finally, the EPA has also announced that for the meat, poultry, pulp, paper, and paperboard industries – which EPA has been investigating for the past two years – “no further review is necessary since EPA has resolved the wastewater discharge issues in both industries and determined an effluent guideline revision is not warranted at this time.”

The public comment period on the Plans, in Docket No. EPA–HQ–OW–2014–0170, must be received by November 17, 2014. Stay tuned here for the latest.

By Wan Li and Craig B. Simonsen

The State Council recently announced new Guidelines for pilot programs for trading emissions permits to reduce air and water pollution.

Key pollutants to be traded under the pilot programs include sulfur dioxide and nitrogen oxide in the air, and chemical oxygen demand and ammonia nitrogen in wastewater. Speaking of these pollutants, Huang Xiaozeng, Deputy Head of the Pollution Emission Control Department of the Environmental Protection Ministry, said earlier this year that “all kinds of measures will be implemented to ensure the tough targets are met.”

The pilot programs had begun in 2007, with areas now or soon to be running pilot trading programs for emissions permits including Tianjin, Hebei province, the Inner Mongolia autonomous region, and the provinces of Shanxi, and Hunan. Under the Guidelines the eleven pilot regions must establish mechanisms for the purchase and trading of emissions by 2017, which is then expected to lay a foundation for the program to be rolled out nationwide.

According to the Ministry of Environmental Protection’s website, during the past year, on Shanxi’s provincial emissions permit trading system alone, over $60 million in emissions permits have been traded between 400 companies. Regions may apply the permits to the pollutants that affect them most, with revenues intended to be provided to local governments to further fund pollution control.

According to the recent State Council statement, “trading of emissions rights must be done in a voluntary, fair and environment-oriented way and trading prices will be decided by the buyer and the seller.” Additionally, “the pilots aim to allow the market to play a decisive role in resources allocation, encourage firms to actively cut pollutant discharges, speed up industrial restructuring and clean the environment.”

The State Council statement, though, differs from a statement offered by Ma Zhong, the Dean of the School of Environment and Natural Resources, at Renmin University, in Beijing, to Reuters. “Emission trading in China is not strictly a market activity and it is more like paying for emitting. It is [currently] just a few regions running some test trading.”

Businesses with interests in China, and especially in these pilot trading program areas, may wish to fully investigate and explore their options when dealing with facility and process permitting requirements. The new Guidelines do create a scheme where facilities will be required to pay for their emissions, but doing so will be necessary to avoid even higher potential penalties for not having the required emissions permits. In the meantime, facilities that participate in the emissions trading permits program will be taking steps toward helping to clean the environment.