U.S. District Court Holds USEPA Must Regulate Previously Exempted Stormwater Runoff  from Specified Commercial, Industrial, and Institutional Sources in Los Angeles

August 31, 2018

On August 9, 2018, the United States District Court for the Central District of California held that the United States Environmental Protection Agency (USEPA) is required to more specifically regulate certain types of stormwater runoff from commercial, industrial, and institutional sources in Los Angeles under the Clean Water Act (CWA).  Los Angeles Waterkeeper v. Pruitt, Case No. 2:17-cv-03454 (C.D. Cal. Aug. 9, 2018).  The case involves USEPA’s Residual Designation Authority (RDA) under the National Pollutant Discharge Elimination System (NPDES) stormwater program (33 U.S.C. § 1342(p)) and adds to a developing line of authority for regulating stormwater under the CWA.

The underlying action involves the Dominguez Channel and the Los Cerritos Channel watersheds in the Los Angeles area that are both impaired by a variety of pollutants, including zinc and copper.  The source for the pollutants is tied to stormwater runoff from the surrounding urban area that is channeled into storm sewer systems before entering the watersheds.  Certain commercial, industrial, and institutional sources do not typically obtain their own individual NPDES permits for stormwater runoff; the runoff is more generally captured by California’s municipal stormwater sewer system (MS4) NPDES permit program.

The CWA’s NPDES permit program addresses water pollution by regulating point sources that discharge pollutants into waters of the United States.  In 1987, Congress amended the CWA to expressly require USEPA to issue NPDES permits to regulate stormwater dischargers.  However, at the same time, Congress exempted some stormwater discharges from the NPDES permit program, which later expired in 1994.  33 U.S.C. § 1342(p)(1)(2).  Congress further limited this exemption by carving out five categories of stormwater discharges (i.e., USEPA’s RDA), including “[a] discharge for which the Administrator or the State, as the case may be, determines that the stormwater discharge 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).  In other words, as the district court explained, “stormwater discharges that fall within one of the five exceptions set forth in the statute are not subject to the exemption and were to be regulated immediately.”

The plaintiffs in the case sought administrative, and then judicial relief, in relation to the above provisions and requested that USEPA make a determination that stormwater discharges from privately-owned commercial, industrial, and institutional (CII) sources in the Los Angeles area were contributing to violations of water quality standards in the watersheds, and therefore the CII sources were required to obtain individual NPDES permits. At the administrative level, USEPA denied the plaintiffs’ request concluding that even though CII sources were “contributing to water quality impairments” and sufficient data existed to demonstrate that stormwater discharges were contributing to water quality impairments in the watersheds, permits were not necessary in light of existing programs such as the MS4 NPDES permit program.

The plaintiffs sought relief in federal district court and argued in part that USEPA’s denial of their request for administrative relief was arbitrary and capricious in violation of the Administrative Procedure Act (APA).  More specifically, the plaintiffs argued USEPA’s actions were arbitrary and capricious because (1) the plain text of the CWA requires USEPA to engage in the NPDES permitting process for the non-specifically regulated stormwater the agency has determined contributes to a water quality violation (i.e., 33 U.S.C. § 1342(p)(2)(E)), and (2) in denying plaintiffs’ request for administrative relief, USEPA considered an improper factor in its denial because it relied on other permitting programs (the MS4 NPDES permitting program) to address the issue.

The court agreed with the plaintiffs and held that the text of the CWA required USEPA to regulate this stormwater. Once USEPA determined that sufficient data existed to demonstrate that stormwater discharges were contributing to water quality impairments in the watersheds, the “statute required EPA to engage in the permitting process or prohibit the discharge.”  33 U.S.C. § 1311(a); 1342(p)(1)-(2).  “But EPA left the stormwater discharges at issue unregulated in violation of the text of the Clean Water Act.  Declining to engage in the permitting process for the stormwater discharges was therefore arbitrary and capricious because it was contrary to law.”

Separately, the court also held that USEPA’s denial of the plaintiffs’ request for administrative relief was arbitrary and capricious because EPA’s reliance on other permitting programs to satisfy its obligation, such as California’s MS4 NPDES permit program, was not supported by any statute under the CWA.  Following the United States Supreme Court’s analogous decision in Massachusetts v. EPA, 549 U.S. 497 (2007) under the Clean Air Act, the court reasoned that when USEPA declined to engage in the permitting process for these stormwater discharges, the agency needed to base its decision on the text of the CWA.  Because USEPA failed to point to a provision in the CWA that indicated the agency could decline to engage in the permitting process based on other permitting programs, such as California’s MS4 NPDES permit program that adequately addressed the issue, USEPA acted arbitrarily and capriciously.

Going forward, USEPA must either (1) engage in the NPDES permitting process for stormwater discharges from the CII sources identified by plaintiffs that USEPA has determined contribute to a violation of water quality standards or (2) enforce the CWA’s prohibition on the discharge of pollutants of these sources.  The case will likely be appealed, but it presents potentially statewide or nationwide implications for regulating this type of stormwater runoff under the CWA.

For assistance in complying with stormwater permitting matters, please contact us.