Citizen Suit Watch: Federal Court Demands EPA Review of Nonpoint Source Regulations As Part of Water Quality Standard Review

In Northwest Environmental Advocates v. United States Environmental Protection Agency, No. 3:05-cv-01876-AC (D. Or. Feb. 28, 2012), an Oregon federal court breached the statutory barrier between the U.S. Environmental Protection Agency (“EPA”) and the regulation of nonpoint sources under the Clean Water Act (“CWA”) by holding that EPA must review various state nonpoint source regulations as part of its review of proposed state water quality standards.  The court found fault with federal agency review under both the CWA and the Endangered Species Act (“ESA”) and triggered the start of a new and uncertain chapter not only for Oregon water quality standards, but also for those subject to state nonpoint source controls nationwide.

Factual Background

The recent district court opinion in Northwest Environmental Advocates is but the latest development in a long and complicated history of Oregon’s attempts to promulgate water quality standards under Section 303 of the CWA. Oregon first set out to revise its temperature and intergravel dissolved oxygen (“IGDO”) water quality criteria in 1996 and, as required, submitted the revised criteria to EPA for approval. 

After consulting with the U.S. Fish and Wildlife Service (“FWS”) and National Marine Fisheries Service (“NMFS”) (collectively, “the Services”), who found that Oregon’s proposed criteria were not likely to jeopardize threatened or endangered species in their ESA review, EPA approved only a portion of the standards. EPA did not approve Oregon’s temperature criterion for salmonid migration and rearing in the Lower Willamette River. However, despite such disapproval, Oregon proffered no further revisions, and EPA did not follow up in promulgating its own replacement criterion for the water body.

These events led to a 2003 lawsuit, where the Oregon district court struck down both EPA’s partial approval and NMFS’s ESA “no jeopardy” finding as arbitrary and capricious.  Subsequently, EPA issued a proposed rule for the promulgation of Oregon water quality standards,¹ and Oregon again issued and re-submitted to EPA revised water quality standards for temperature, IGDO, and antidegradation. Again, the Services issued a “no jeopardy” finding with respect to the effects of the proposed revised standards on listed salmonid species, as well as bull trout, Lahontan cutthroat trout, Oregon chub, Warner sucker, Lost River sucker, Shortnose sucker, and Modoc sucker. 

Having concluded its review, EPA approved the new Oregon water quality standards.  Both EPA’s approval and the Services’ corresponding ESA review were challenged in the instant lawsuit under the CWA, ESA, and the Administrative Procedure Act.  Plaintiff Northwest Environmental Advocates (“NWEA”) filed two Motions for Partial Summary Judgment on its claims against EPA and the Services (“Defendants”).  Defendants filed Cross-Motions for Partial Summary Judgment in response.  The court’s opinion addresses the various claims for summary judgment, in some instances deferring to the judgment of the relevant federal agencies, while in others invalidating significant aspects of the agencies’ decisions.  The discussion below highlights the significant aspects of the opinion.

Clean Water Act Claims

NWEA claimed that EPA should have reviewed various Oregon regulations as part of its review of the water quality standards.  The specific Oregon regulatory provisions in question, though not specifically termed “water quality standards,” were nonpoint source provisions related to Oregon’s water quality criteria. These provisions provided, for example, that forestry and other operations consistent with best management practices would be “deemed to be in compliance” with temperature and certain other criteria.²  NWEA alleged, first, that these provisions amounted to “water quality standards” subject to mandatory review by EPA under the CWA and, alternatively, that, even if not “water quality standards,” the provisions were subject to mandatory review in light of their effect on Oregon water quality standards, despite their emphasis on nonpoint source pollution. EPA, in opposition, argued that the provisions “merely address how the water quality standards are to be implemented with respect to nonpoint sources” and further maintained that it lacked statutory authority to review such nonpoint source provisions. 

Concerned that the provisions “could present a considerable obstacle” to complying with applicable water quality standards, the court ultimately accepted NWEA’s alternative grounds for requiring review, finding that the provisions are “intrinsically intertwined with the promulgated water quality standards and have the potential to supplant or, at the very least, delay the attainment of these standards.”  The court made that finding despite EPA’s statutory role in regulating only point source pollution, and it held that the nonpoint provisions in question are “part and parcel of Oregon’s water quality standards” and thus, “EPA had a nondiscretionary duty to review” them. 

The court made it clear that its ruling “does not mean EPA is required to directly regulate nonpoint sources,” but it nevertheless held that EPA was required to review the nonpoint provisions at issue.  In so holding, the court pointed to the Ninth Circuit’s decision in Pronsolino v. Nastri,³ which required EPA to review state total maximum daily load (“TMDL”) listings even where all of a water body’s pollution derived from nonpoint sources.  While acknowledging potentially conflicting Tenth Circuit precedent in American Wildlands v. Browner,⁴ the court declined to provide any significant analysis of that case, paving the way for a possible circuit split down the road.

In addition to its ruling on Oregon’s nonpoint source regulatory provisions, the court also granted summary judgment to NWEA on its claim that EPA’s approval of Oregon’s narrative natural conditions criteria (“NCC”) was arbitrary and capricious. The Oregon NCC regulations provided that where a water body’s natural thermal potential temperature exceeded numerical temperature criteria, the former would trump the latter.  NWEA challenged the NCC on five different grounds,⁵ and the court found that Oregon exceeded its authority under CWA regulations by establishing narrative NCC that supplanted numeric criteria.  In addition, the court considered the NCC to have improperly relied on historic water temperature data without sufficiently taking into account contemporaneous changes to the relevant water bodies over time, including changes to the salmonid populations and river conditions.

The court granted summary judgment to the Defendants on the remaining CWA claims.  Significantly, the court found reasonable EPA’s approval of Oregon’s revised water body use designations, including EPA’s replacement of general designations with more a specific “suite of uses” intended to correlate with individual life stages. Because it held that the revised use designations constituted more specific categorizations as opposed to new or less stringent designations, the court found that a Use Attainability Analysis was not required.

Endangered Species Act Claims

The court’s opinion went on to address each of NWEA’s ESA-based challenges to the Services’ “no jeopardy” finding and critical habitat analyses.  First, it held that NMFS’s “cursory” consideration of the effects of EPA’s approval of water quality standards on fourteen different evolutionarily significant units of salmon and steelhead individually compromised the reasonableness of its determinations with respect to those species. 

Second, the court found NMFS’s Biological Opinion (“BiOp”) deficient because it failed to sufficiently address issues of species recovery, given that NMFS (1) “did not identify the conditions necessary for recovery of the listed species or their critical habitat” and (2) did not offer significant analysis of short-term impacts. 

Third, the court called for NMFS to reconsider the impacts of the proposed water quality criteria by clear reference to the environmental baseline, holding that it is not enough that satisfaction of the new criteria represents an improvement in the status quo.  The court also invalidated NMFS’s cumulative impacts review for failure “to conduct a thorough cumulative effects analysis,” citing the same concern that a mere improvement in conditions cannot suffice to support a BiOp’s conclusions.

Finally, the court held that FWS’s “no jeopardy” and “no adverse modification” findings for bull trout were arbitrary and capricious.  According to the court, FWS improperly reached its conclusions in part on the basis of policy-focused, “extra-scientific considerations” that are inconsistent with Congressional intent.  In addition, the court found error with the BiOp’s lack of consideration for each distinct population segment of bull trout. 

Implications

While many of the court’s rulings undoubtedly carry implications for Oregon’s regulation and management of its waters and aquatic wildlife, the court’s ruling on EPA’s duty to review nonpoint source regulatory provisions has ramifications on a far broader scale and raises serious concerns regarding the extent of federal authority over state nonpoint source pollution management.  The decision appears to run directly counter to the federal-state balance in the CWA with respect to point and nonpoint sources, with any regulation of nonpoint sources left solely in the hands of the states.

While the District of Oregon’s decision does not go so far as to declare that EPA has authority to “directly regulate nonpoint sources,” the court’s holding that certain nonpoint source provisions are subject to mandatory EPA review nonetheless may represent a significant opportunity for indirect EPA entrée into the sphere of nonpoint source regulation.  It could also create another hurdle for states considering what they must submit to EPA (and when) in order to comply with CWA requirements. 

Last, the decision does not address what would occur should the state fail to act after EPA disapproval of such nonpoint source standards.  Given the CWA’s requirement that EPA step in and promulgate proposed standards for the state in such instances, exactly how EPA might do this without overstepping its authority is unclear. 

¹68 Fed. Reg. 58,758 (Oct. 10, 2003). EPA, however, never promulgated final standards.

²See, e.g., Or. Admin. R. 340-041-0028(12)(e)-(h), 340-041-0061(11) & (13), 340-041-0004(4)(a) & (b).

³291 F.3d 1123 (9th Cir. 2002).

⁴260 F.3d 1192 (10th Cir. 2001).

⁵ These grounds were: (1) that the NCC “effectively swallows” the numeric criteria, especially as it applies to all water bodies with temperature TMDLs; (2) that the NCC unjustifiably effects only increases in applicable temperature requirements; (3) that Oregon’s methodology for estimating natural potential temperature reflected too much uncertainty; (4) that the NCC effectively allow increases in water quality standards in the absence of EPA nondiscretionary review; and (5) that Oregon exceeded its authority under CWA regulations by establishing narrative NCC that supplants, as opposed to supplements, numeric criteria.