On July 6, 2015, a three-judge panel of the U.S. Court of Appeals for the Third Circuit unanimously rejected a challenge brought by agricultural and builder groups to the U.S. Environmental Protection Agency’s Chesapeake Bay “Total Maximum Daily Load” (“TMDL”). [1] The decision paves the way for full implementation of the TMDL’s comprehensive pollutant reduction plan for sources of nitrogen, phosphorous, and sediment in the Chesapeake Bay watershed.
The Chesapeake Bay TMDL,[2] which EPA issued in December 2010, identifies the total amount of certain constituents (i.e., the total maximum daily load) that the watershed can contribute to the bay in order to restore water quality to a level that will support protected water uses (such as fisheries and recreation). Based on these total maximum daily loads, the TMDL then allocates individualized pollutant loadings to “point sources” (such as wastewater treatment plants and industrial dischargers) and “non-point source” sectors (such as agriculture and stormwater runoff) in the affected portions of Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia, and the District of Columbia. The TMDL also establishes deadlines for the states to develop and implement plans to come into compliance with the designated loadings.
The plaintiffs in the case argued that the source- and sector-specific pollutant allocations and compliance timelines exceeded EPA’s authority under the Clean Water Act,[3] claiming that the statute only confers on EPA the authority to establish a “total maximum daily load” for impaired waters (if the states fail to do so), but is silent with respect to EPA’s authority to direct TMDL implementation in the states.[4] The court disagreed, finding EPA’s inclusion of the contested TMDL elements to be a legitimate policy choice that was grounded in a reasonable interpretation of the Act. In this regard, the Third Circuit affirmed a September 2013 decision of the federal district court for the Middle District of Pennsylvania, which similarly upheld the Bay TMDL.[5]
The plaintiff agricultural and builder groups may attempt to obtain reconsideration by the Court of Appeals, or seek to appeal the Third Circuit’s decision to the U.S. Supreme Court. However, in the meantime, EPA and the Bay states will move forward with implementation of the TMDL and the states’ accompanying watershed implementation plans (“WIPs”), which collectively call for significant pollution reductions from farms, municipalities, and industrial dischargers.
1. Establishment of TMDLs under Section 303 of the Clean Water Act
Section 303 of the Clean Water Act[6] governs the interrelated processes by which the states and EPA establish water quality standards, identify impaired waters, and create TMDLs for those waters.
First, the states are required to establish “water quality standards,” consisting of (1) designating one or more uses (e.g., fishing, recreation, agriculture) for each federally-regulated water body, and (2) promulgating the narrative or numeric water quality criteria necessary to protect these uses.[7] EPA must approve or disapprove the states’ water quality standards, and, if the latter, promulgate its own water quality standards for the state.[8]
Once water quality standards are in effect, states must identify the water bodies that are failing to attain those standards using traditional methods of pollution control under the Clean Water Act, such as the imposition of effluent limits on point source dischargers through national pollutant discharge elimination system (“NPDES”) permits.[9] This list of waters is often referred to as the “impaired waters list” or “Section 303(d) list.” States must submit their impaired waters lists to EPA for approval, and if EPA disapproves, EPA must itself identify impaired waters in the state.[10]
The states then must establish a TMDL for each identified impaired water. Specifically, under Section 303(d)(1)(C) of the Act, the states “shall establish… the total maximum daily load” of pollutants for each impaired water, which “shall be established at a level necessary to implement the applicable water quality standards with seasonal variations and a margin of safety….” [11] The states must submit their TMDLs to EPA for approval, and if EPA disapproves, EPA shall “establish such loads for such waters as [EPA] determines necessary to implement the water quality standards applicable to such waters….”[12] Once EPA establishes a TMDL, the state “shall incorporate [it] into its current plan” for implementing various requirements of the Clean Water Act, which EPA refers to as “water quality management plans.”[13]
Pursuant to these statutory provisions, EPA and the states have developed approximately 68,000 TMDL’s across the country. TMDLs have become an increasingly important Clean Water Act tool because they provide a means for EPA to pursue pollution reductions from non-point sources (including most of the agricultural sector), which otherwise are not subject to federal regulation or permitting requirements under the Clean Water Act. After more than 40 years of aggressive Clean Water Act enforcement against point source dischargers, non-point source pollution is often viewed as the lowest-hanging fruit remaining when it comes to achieving additional improvements in the quality of our nation’s waters.
2. The Chesapeake Bay TMDL
In October of 2007, after more than 30 years of coordinated multi-state efforts to restore the degraded water quality of the Bay, the seven Bay jurisdictions and EPA reached consensus that they would jointly develop and EPA would establish a Bay TMDL. Similarly unsatisfied with the pace of restoration efforts, the Chesapeake Bay Foundation and others brought suit against EPA in January 2009 to force aggressive federal action to cleanup the Bay.[14] EPA and the Chesapeake Bay Foundation reached a settlement agreement in May 2010 that required EPA to establish a TMDL for the watershed by December 31, 2010. Accordingly, EPA issued the Chesapeake Bay TMDL on December 29, 2010, after a period of intense wrangling between EPA and the Bay states over the TMDL’s form and content. The TMDL was based in substantial part on the states’ Phase I watershed implementation plans (“WIPs”), which the states developed with significant EPA oversight and influence.
As noted by the federal district court for the Middle District of Pennsylvania, “[t]he Chesapeake Bay TMDL… is the largest and most complex TMDL” created since the inception of the Clean Water Act.[15] EPA itself describes the TMDL as “a historic and comprehensive ‘pollution diet’ with rigorous accountability measures to initiate sweeping actions to restore clean water in the Chesapeake Bay and the region’s streams, creeks and rivers.”[16]
The Bay TMDL begins by setting total maximum loadings for nitrogen, phosphorous and sediment in 92 discrete impaired segments of the Bay watershed (276 total loads). These loadings were developed using water quality monitoring networks and predictive modeling. EPA’s total load determinations were not challenged before the Third Circuit, although the plaintiffs did (unsuccessfully) object to some aspects of EPA’s modeling before the Middle District of Pennsylvania.[17]
Next, the TMDL contains “waste load allocations” (“WLAs”) for point sources and “load allocations” (“LAs”) for non-point source sectors that allocate the total loads between significant sources of pollution in the watershed. These WLAs and LAs are not self-executing. However, pursuant to EPA regulation, NPDES permit writers must incorporate permit limits that are consistent with the WLA’s when point source permits come up for renewal.[18] With respect to non-point sources, EPA required the states to commit to specific regulatory actions in their WIPs to provide “reasonable assurance” that the required reductions in pollution will come to fruition. EPA based the WLAs and LAs in substantial part on the allocations proposed in the states’ Phase I WIPs. However, in a handful of instances, EPA rejected the states’ proposed allocations, instead setting forth “backstop” allocations, adjustments, and actions that EPA thought necessary to reasonably assure that the overall load reductions are achieved. For instance, in Pennsylvania, EPA shifted 50 percent of Pennsylvania’s urban stormwater load from the LA (non-point source) to the WLA (point source) category, signaling EPA efforts to control stormwater runoff from urban and suburban areas via NPDES permit requirements for municipal separate storm sewer systems (“MS4”).[19]
The TMDL also sets interim and final deadlines for the states to identify and implement all control measures necessary to achieve the pollution reductions called for in the TMDL. The states submitted their more refined Phase II WIPs to EPA in 2012, and are required to submit Phase III WIPs to EPA by 2017. The TMDL requires that at least 60 percent of all necessary pollution control measures be implemented by 2017, with full implementation by 2025.[20] If the states fail to meet these deadlines, EPA has indicated (some would say threatened) that it will take aggressive action to correct any deficiencies, including, but not limited to, expanding the scope of the NPDES permit program, requiring additional pollution reductions from point source dischargers, prohibiting new or expanded discharges, increasing federal enforcement, and conditioning or redirecting federal grant money.[21]
3. The District Court Decision
Shortly after EPA issued the Chesapeake Bay TMDL, the American Farm Bureau Federation and the Pennsylvania Farm Bureau filed a complaint against EPA in the federal district court for the Middle District of Pennsylvania. Other agricultural groups and the National Association of Home Builders eventually joined in the suit. Environmental groups and associations representing municipal wastewater agencies intervened on EPA’s...
