Last week, the U.S. District Court for the Central District of California gave environmental groups a significant win in their bid to force EPA to regulate new sources of stormwater discharges under the Clean Water Act (CWA). The case, Los Angeles Waterkeeper v. Pruitt, No. 2:17-cv-03453, is one of several pending actions concerning EPA’s authority to require National Pollution Discharge Elimination System (NPDES) permits for sources of stormwater that are not currently regulated. If the court’s decision withstands a likely appeal, EPA will be required to prohibit or issue NPDES permits for discharges of stormwater from privately-owned commercial, industrial, and institutional (CII) sites like malls, office buildings, and parking lots.

A Rejected Bid for Residual Designation

This case arose from EPA Region 9’s rejection of a petition for EPA to exercise its “residual designation authority” (RDA) to regulate stormwater discharges from CII sites. EPA’s RDA gives the Agency discretion to require permits for any stormwater discharge that “contributes to a violation of a water quality standard or is a significant contributor of pollutants to waters of the United States.” 33 U.S.C. § 1342(p)(2). Los Angeles Waterkeeper and other environmental groups petitioned Region 9, asking EPA to require NPDES permits for CII sites because they contributed to the impairment of the Dominguez and Los Cerritos Channels.

EPA found that CII sites contributed to violations of water quality standards in both bodies of water but nonetheless declined to require NPDES permits from CII sites. EPA determined that the impairment of both channels was adequately addressed by NPDES permits issued for MS4s in the channels’ watersheds and several other statewide permits. EPA determined that the controls implemented by these permits obviated the need to require NPDES permits for CII sites in these watersheds.

Limits on EPA’s Discretion

The court found that EPA acted contrary to the CWA’s text by declining to regulate stormwater discharges from CII sites. Although EPA possesses discretion to exercise its RDA, the court found that EPA’s finding that CII sites contributed to violations of water quality standards left the Agency with only two options: (1) issuing NPDES permits for these stormwater discharges or (2) completely prohibiting the discharges. The court read CWA Sections 301 and 402 not to afford EPA discretion to leave unregulated a source of stormwater found to contribute to violations of water quality standards.

The court further concluded that EPA cannot decide RDA petitions based on the availability of other federal, state, and local controls to address the source of stormwater pollution. Instead, the text of Section 402(p) limits the factors that EPA may consider strictly to whether a stormwater discharge (a) contributes to a violation of water quality standards or (b) is a significant contributor of pollutants. EPA’s consideration of a factor not listed in the statute rendered its action arbitrary and capricious.

More to Come?

Los Angeles Waterkeeper is just one of several cases in which environmental groups have sought to force EPA to regulate additional sources of stormwater pollution. In Blue Water Baltimore v. Pruitt, No. 17-cv-1253 (D. Md.), environmental groups are also seeking review of EPA’s denial of a petition seeking residual designation of CII sites discharging stormwater to the Back River watershed in the Baltimore area. Both the plaintiffs and EPA have filed cross-motions for summary judgment. Earlier this year, the First Circuit denied the Conservation Law Foundation’s (CLF) bid to require NPDES permits automatically for any source of stormwater identified in a Total Maximum Daily Load (TMDL). Conservation Law Foundation v. Pruitt, 881 F.3d 24 (2018). CLF had argued that identification of a source in a TMDL was per se a residual designation triggering the requirement to obtain an NPDES permit.

The decision in Los Angeles Waterkeeper raises the possibility that the NPDES stormwater program could sweep in numerous facilities, like warehouses and shopping malls, that may not have required NPDES permits in the past. Owners of these and other facilities facing the specter of new stormwater-associated regulatory burdens may want to consider amicus participation in any appeal to the Ninth Circuit. They will also want to monitor closely the Bluewater Baltimore litigation and any future petitions filed in the wake of Los Angeles Waterkeeper.

Beveridge & Diamond’s Water practice group develops creative, strategically tailored solutions to challenges that arise under the nation’s clean water laws. The firm’s attorneys have represented clients in a range of industries in project planning as well as in litigation and enforcement proceedings on issues arising from the growing convergence of water supply, use, and quality issues. For more information, please contact the authors.