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U.S. District Court Rules EPA Acted Arbitrarily and Capriciously In Refusing to Regulate Certain Stormwater Discharges

The U.S. District Court for Maryland recently granted summary judgment against the U.S. Environmental Protection Agency (EPA) for acting arbitrarily and capriciously when it refused to regulate stormwater discharges from privately-owned commercial, industrial, and institutional sites on the basis of other state and federal programs’ efforts to control stormwater discharges. [Blue Water Baltimore, Inc. v. Wheeler,___F.Supp.3d___, Case No. GLR-17-1253 (D. Md. Mar. 22, 2019).]

Factual and Procedural Background

Plaintiffs Blue Water Baltimore, Inc., Natural Resources Defense Council, and American River filed a petition with EPA under § 402(p)(2) of the federal Clean Water Act (CWA), asking the EPA to determine whether stormwater discharges from privately-owned commercial, industrial, and institutional (CII) sites were contributing to violations of water quality standards in the Back River Watershed (Baltimore, Maryland). EPA denied plaintiffs’ petition on three factors: 1) the likelihood of the pollutants’ exposure to precipitation at the CII sites; 2) the sufficiency of available data to evaluate the stormwater discharges’ contribution to water quality standards at the CII sites; and 3) whether other federal, state, or local programs adequately addressed the known stormwater discharge. Plaintiffs then sued the EPA, Andrew Wheeler, and Cosmo Servidio (collectively: EPA), alleging that EPA violated the CWA and the Administrative Procedure Act (APA) because: 1) EPA’s denial of the petition was arbitrary and capricious for relying on other federal, state, or local programs, and 2) EPA’s denial ran counter to the evidence before it. The court granted a prior motion to dismiss plaintiffs’ Clean Water Act claims, and therefore only the APA claims remained at issue.

Plaintiffs filed a Motion for Summary Judgment on their two claims of the APA violations. EPA filed a Cross-Motion for Summary Judgment.

The District Court’s Decision

Under the APA, a court is required to “hold unlawful and set aside agency action” that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

The court considered four main arguments raised by the EPA: 1) that the court should defer to the EPA’s determination that it may consider other federal, state, and local programs; 2) that consideration of existing programs is a “reasonable explanation” for declining to act; 3) that the § 402(p)(2) set forth prerequisites that EPA must establish prior to exercising its discretion to regulate stormwater discharges; and 4) that § 402(p)(6) expands the permissible grounds on which EPA may make its decision. The court rejected each argument.

Agency Deference

First, EPA argued it was entitled to Chevrondeference for its interpretation that the Clean Water Act allows consideration of other federal, state, and local programs. The court rejected this argument, reasoning that Chevrondeference applies only when the statute is ambiguous or silent as to the question at issue. Here, § 402(p)(2)(E) was not silent or ambiguous—the statute left no room for open interpretation when directing EPA to determine whether the discharge contributed to water quality violations. The court therefore did not accord any deference to EPA’s interpretation of the statute. In reaching this conclusion, the court relied on an analogous provision in the federal Clean Air Act, and the U.S. Supreme Court’s determination in Massachusetts v. U.S. EPA, 549 U.S. 497 (2007) that considering other programs was arbitrary and capricious under the Clean Air Act.

Instead of deferring to EPA’s interpretation of § 402(p), the court determined that EPA was required to conduct a scientific inquiry when making its decision. EPA’s first two factors, 1) the likelihood of the pollutants’ exposure to precipitation at the CII sites and 2) the sufficiency of available data to evaluate the stormwater discharges’ contribution to water quality standards at the CII sites, were proper grounds for EPA to make its scientific finding of whether stormwater discharges from CII sites contribute to violations of water quality standards. The third factor, looking at other existing programs, was “unrelated to this scientific inquiry and is, therefore, ‘divorced from the statutory text,’” because it deferred to other existing programs and how they addressed environmental impacts of the stormwater discharge. The court determined that although EPA can consider data from existing programs for the purpose of determining whether the stormwater discharges from the CII sites contribute to water quality violations, it could not rely on the environmental impacts of stormwater discharges through existing programs.

Reasonable Explanation

Second, the court rejected EPA’s argument that consideration of existing programs is a “reasonable explanation” as to why EPA declined action. EPA also argued that EPA should be allowed to consider policy concerns in making its findings. The court also rejected this misinterpretation of the Massachusetts’decision, stating that the Supreme Court in Massachusetts never reached question of allowing EPA to factor in policy concerns, but nevertheless emphasizing that the Massachusetts made it clear EPA must base its decision in the statute, not external factors. Here, EPA failed to do that.

Discretion to Regulate and Expansion

Third, EPA argued that § 1342(p)(2)(E) merely sets forth prerequisites that EPA must establish prior to exercising its discretion to regulate stormwater discharges. The court disagreed, holding that in light of Massachusetts, EPA may only decline to regulate if it answers the scientific question that stormwater discharges do not violate water quality standards, or concludes that there is not enough information to answer this question.

Finally, the court dismissed EPA’s argument that § 402(p)(6) expands the permissible grounds on which EPA may make its decision. The court found that §§ 402(p)(2) and 402(p)(6) are mutually exclusive. EPA’s decision in refusing to regulate stormwater discharges from CII sites must be grounded solely in the text of § 1342(p)(2)(E).

Conclusion and Implications

This case provides two excellent examples of the relationship between environmental statutes. First, this case demonstrates how the Clean Air Act often serves as an interpretive guide for the Clean Water Act. Second, this case outlines the limits that a regulatory action under one environmental program has to other programs. That is, the EPA cannot rely solely on the existence of other regulatory programs to refuse to regulate under Clean Water Act, § 402(p)(2). The court’s decision is available online at: https://www.nrdc.org/sites/default/files/media-uploads/baltimore_rda_district_court_decision_3-22-19.pdf

(Rebeca Andrews, Hannah Park)