Beveridge & Diamond
 

Supreme Court Hears L.A. Stormwater Case

Beveridge & Diamond, P.C., January 2, 2013

On December 4, 2012, the United States Supreme Court considered the potential liability of the Los Angeles County Flood Control District (the “District”) for stormwater runoff under a municipal stormwater permit. (Los Angeles County Flood Control District v. NRDC, No 11-460, oral argument 12/4/2012). The District asked the Supreme Court to reverse a decision by the U.S. Court of Appeals for the Ninth Circuit, which had held that the District violated its permit by channeling stormwater into the Los Angeles and San Gabriel Rivers, and to remand the case to the Ninth Circuit to reconsider its decision to evaluate channelized portions of the rivers as distinct waterbodies. If the substance and tone of the Justices’ questions during the argument are any indication, the Court appears likely to side with the District.

Background

Section 402(p) of the Clean Water Act (“CWA”) authorizes the Environmental Protection Agency to regulate stormwater discharges from municipal separate storm sewer systems (“MS4s”). 33 U.S.C. § 1342(p). MS4s collect stormwater and carry it away from homes, businesses, and roads through a complex infrastructure network that includes gutters, storm drains, sewers, and more, ultimately discharging the stormwater to receiving waters. Such stormwater discharges often pose water quality concerns because as water flows over surfaces, it may pick up pollutants, pathogens, and toxins that ultimately enter the receiving waters. As a result, Section 402(p) requires MS4s serving populations of 100,000 or more to obtain National Pollutant Discharge Elimination System (“NPDES”) permits before discharging stormwater to waters of the United States. But unlike with other NPDES permits, MS4 permits may be issued to allow regulators to treat what enters the system through stormwater management rather than end-of-the-pipe pollution controls and on a system-wide basis, enabling local governments to jointly apply for a single permit to govern interconnected systems discharging into the same waters.

The District, along with Los Angeles County and 84 cities, holds a system-wide MS4 permit (the “Permit”) that covers stormwater discharges from a vast urban area of Southern California, including thousands of miles of storm drains and hundreds of miles of open channels. The Permit prohibits “discharges from the MS4 that cause or contribute to violation of Water Quality Standards or water quality objectives,” but states that “each co-permittee is responsible only for discharge for which it is the operator.” The Permit contemplates compliance through implementation of control measures and a monitoring and reporting program, which establishes locations for compliance monitoring at “mass emissions stations” downstream of the system’s discharge points. Those stations collect water samples that are analyzed for pollutant constituents in the stormwater flowing out of the MS4 into receiving waters such as the Los Angeles and San Gabriel Rivers. The data collected at those stations repeatedly showed exceedances of numerous pollutants. But the stations were located in somewhat of a unique area – downstream of where the District’s and others’ storm drains discharge into the rivers, in channelized sections of the rivers that are part of the MS4.

In 2008, the Natural Resources Defense Council and Santa Monica Baykeeper (together the “environmental groups”) sued the District under the CWA’s citizen suit provision alleging that the District and Los Angeles County were violating their MS4 permit by causing or contributing to exceedances of water quality standards in the Los Angeles River, San Gabriel River, Santa Clara River, and Malibu Creek (collectively, the “watershed claims”). The District countered that it was not liable because it simply oversees sections of the rivers for flood control purposes, and pollutants that pass through the MS4 originate from upstream municipalities located in the areas that drain into the rivers.

The U.S. District Court for the Central District of California granted summary judgment for the District on all four watershed claims. The district court explained that data from the mass emissions stations could be used for determining whether the entire MS4 system is in compliance with its Permit, but it could not be used to determine whether the District, as one co-permittee out of many, was responsible for “discharges from the MS4 that cause or contribute to the violation” of standards in the Permit.

On appeal, the Ninth Circuit agreed that an exceedance detected by the District’s mass-emissions monitoring is a Permit violation for which contributing dischargers are liable. But the Ninth Circuit also found that the monitoring data were sufficient to establish that the District was liable for Permit exceedances because it believed the data showed that the District had discharged stormwater that caused or contributed to the Permit violations. The Court explained that the monitoring stations for the Los Angeles and San Gabriel Rivers are located in the District’s MS4, that the monitoring stations had detected pollutants in excess of the amounts authorized by the Permit, and that the polluted stormwater was discharged from the MS4 into the rivers. Thus, the Ninth Circuit concluded that the District had discharged pollutants in violation of the Permit and Section 402 of the CWA.

Supreme Court Arguments

On the District’s petition for writ of certiorari, the Supreme Court granted review to consider whether the Ninth Circuit’s ruling squared with the Court’s 2004 holding in South Florida Management District v. Miccosukee Tribe of Indians. There, the Supreme Court had stated that there is no “discharge of pollutants” under the CWA when water is pumped between “two hydrologically indistinguishable parts of a single water body.” 541 U.S. 95, 109 (2004). At oral argument, however, that issue did not take center stage. The Court and counsel for all parties agreed that the Miccosukee question was not implicated because there was no dispute about the location of the monitoring stations – they are located in the river, not separate from it, as the Ninth Circuit’s opinion had suggested. Accordingly, the bulk of the oral argument was devoted to whether the District could be held liable for the violations detected by the monitors.

A. The District’s Argument

Before the Supreme Court, the District argued that the Ninth Circuit’s decision was wrong for two key reasons. First, under Miccosukee, the District argued that the mere channelization of stormwater from a concrete channel of a river into a non-channelized portion of the same river was not a “discharge of pollutants” under the CWA. Second, it asserted that the monitoring stations at issue could not establish liability against the District because they are located in areas of the rivers where discharges from as many as 1400 sources commingle, making it impossible to determine who was responsible for the detected exceedances. Because the District’s Permit provided that co-permittees are responsible only for their own discharges, the District argued that monitoring results for the system as a whole could not establish liability for just one co-permittee that uses the system. Thus, while the District conceded that it is the largest contributor of discharges to the MS4 system, it asserted that it could not be liable for a Permit violation unless evidence showed that it discharged the pollutants that caused the exceedances.

Justice Sotomayor, seemly receptive to this argument, echoed the District’s position that there was no way to know whether the discharged pollutants came from the MS4 or some other source. Chief Justice Roberts appeared to disagree, however. He suggested that the argument was “circular,” stating on one hand that holders of the Permit have a responsibility to monitor discharges, but on the other that there is no liability imposed when exceedances of discharge standards are reported. Justice Ginsburg concurred with the Chief Justice, asking “What’s the purpose of having the monitoring stations if nothing can be done?” The District’s counsel responded that, under a recently-approved new permit, there will be more monitoring at outfalls, which will make it easier to determine each permit holder’s contribution to overall pollution levels. Justice Breyer seemed satisfied by this response, stating that it was a “rational way to proceed,” and several Justices nodded in agreement.

B. The Environmental Groups’ Argument

Counsel for the environmental groups took a different approach, arguing that the Permit’s compliance monitoring requirement established the District’s liability as a matter of law. According to the groups, the Permit requires the District and other individual co-permittees to comply with all of the Permit’s terms, and any violation of those terms violates the CWA and is grounds for an enforcement action. The groups then explained that the Permit requires permittees to conduct inspections and water quality monitoring to ensure compliance, and the District was doing just that with its mass emissions monitoring stations. Thus, the groups argued, exceedances shown by the monitoring data demonstrated that the District was “causing or contributing to violation of water quality standards” in violation of the Permit.

Chief Justice Roberts and Justices Scalia, Breyer, Kennedy, and Ginsburg questioned the soundness of the groups’ argument. Justice Scalia in particular was skeptical that exceedances detected during required water quality monitoring amounted to a Permit violation, noting that co-permittees are liable only for their own discharges.

For their part, Justices Kennedy and Ginsburg were concerned about how liability for Permit violations would be allocated among contributors to the MS4 under the groups’ interpretation. Counsel for the groups responded that because the Permit specifies that co-permittees are liable only for their own discharges, the District would be liable only for the pollutants it contributes. But the groups asserted that the burden would be on the District to show it did not contribute pollutants or that the pollutants contributed did not cause or contribute to a Permit exceedance. If the District could show it did not contribute pollutants, the environmental groups concluded, upstream co-permittees would have to sort out the liability among themselves.

The Justices appeared skeptical of the environmental groups’ explanation. Justice Breyer suggested that the role of the monitoring system is to draw attention to a pollution problem, not to assign liability. He posited that the Permit’s monitoring provisions were created simply to help make EPA aware of exceedances so that the agency could address them. In the same vein, Chief Justice Roberts suggested that the Permit’s monitoring provisions were simply boilerplate language, with no liability-assigning function.

C. United States’ Argument

The U.S. government submitted an amicus brief in the case supporting neither the District nor the environmental groups. The United States asked the Supreme Court to vacate the Ninth Circuit’s decision and remand, arguing that a “discharge of a pollutant” does not exist merely because polluted water flows past a monitoring station. Thus, the government asserted that the Permit’s terms should be reevaluated by the Ninth Circuit with that understanding in mind.

Justices Sotomayor and Scalia seemed skeptical that the Ninth Circuit could interpret the Permit differently than it had. Justice Scalia added that he did not see “how the Court of Appeals is going to be able to do anything different other than say there’s no liability here, unless, of course, it adopts another fanciful interpretation of the statute, which is something I worry about.” Without any other Justices voicing a contrary position on the issue, it appears that the Court may give little weight to the position of the federal government.

Conclusion and Implications

The Supreme Court appears set to rule for the District that no “discharge of a pollutant” occurred within the meaning of the CWA (and under its prior holding in Miccosukee) because the District’s monitoring stations were part of the rivers “receiving” the discharges at issue. In light of the tone and focus of their questions during the argument, the Justices also appear to be leaning towards ruling for the District on the question of liability for Permit violations. Such an outcome would maintain the status quo for scores of municipalities regarding their NPDES permitting obligations.

Should the Justices side with the environmental groups, however, the effects would be significant and far-reaching. Such a ruling would alter longstanding interpretations of water quality monitoring provisions in permits and potentially impose immense financial and regulatory burdens on large cities across the United States. Many municipalities would be required to permit urban stormwater discharges from each of their hundreds of outfalls or entirely overhaul their stormwater systems to avoid CWA liability.

The Court could issue its ruling as soon as late February 2013.

For more information, please contact Parker Moore, 202-789-6028, pmoore@bdlaw.com, or Sara Vink, 202-789-6044, svink@bdlaw.com.

A PDF copy of this summary is available here.

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