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Stormwater Permit Revisions Could Limit Citizen Suits Against Industry - Article in the Daily Journal, April 22, 2011

Statewide Stormwater Permit Revisions Could Limit Citizen Suits Against Industry

By Donald E. Sobelman and Kathryn L. Oehlschlager

The State Water Resources Control Board is on the verge of adopting revisions to the Industrial Stormwater General Permit that could have a major impact on the regulated community. The draft permit, versions of which have been under review for nearly a decade, will likely be adopted in late 2011 or early 2012. The State Board recently extended the comment period on the draft permit until April 29.

There are three key new elements to the draft permit. First, it adopts U.S. Environmental Protection Agency (EPA) benchmark levels as numeric effluent limits on contaminants in stormwater discharges, requiring facilities with repeated discharges in excess of those limits to take corrective action, and – if exceedances persist – pay mandatory minimum penalties. Second, the draft permit will require industrial facilities operating under the permit to adopt significant – and potentially expensive – changes to their stormwater management programs, including mandatory minimum best management practices, more frequent monitoring, and increased training for employees. Finally, and perhaps most significantly, the draft permit may limit the circumstances in which plaintiffs can file Clean Water Act citizen suits based on detections of contaminants in stormwater discharge.

In light of the significant impacts of the revisions, regulated entities would be well-advised to begin thinking about what steps they will need to take to comply with the draft permit if it is adopted in its current (or a similar) form.

The federal Clean Water Act establishes a framework for regulation of pollutants discharged in stormwater runoff from industrial facilities under the National Pollutant Discharge Elimination System (NPDES) program. Pursuant to that framework, authorized states – including California, via the State Board and its regional boards – issue individual and general NPDES permits regulating such discharges.

For the last 14 years, the State Board’s Industrial Stormwater General Permit Order 97-03-DWQ has regulated industrial facilities in 10 broad categories, including manufacturing facilities, landfills, recycling facilities, transportation facilities, and wastewater treatment plants, among others.  Each regulated facility is required to develop a stormwater pollution prevention plan and a monitoring and reporting program. In addition, facilities must develop and implement best management practices designed to achieve the performance standards known as “best available technology economically achievable” and “best conventional pollutant control technology.”  This means that each facility should do what is economically and technologically feasible to reduce levels of contaminants in stormwater discharge.

The implicit goal of this program is to reduce pollutants in stormwater discharges to below “benchmark” values established by EPA. Though exceeding these benchmarks are not violations of the current permit per se – courts have used the benchmarks as guidelines to evaluate the effectiveness of a facility’s stormwater management program.

Like other environmental laws, the Clean Water Act has a “citizen suit” provision, which allows third-party plaintiffs to file suit against any person alleged to be in violation of certain provisions. It is common practice for these “citizen enforcers” to file suit against industrial facilities operating under the current permit who have discharged stormwater with pollutants at levels in excess of EPA benchmarks.  Although these exceedances are not necessarily permit violations, the standards for compliance with the current permit are murky, and citizen suits often settle out of court. In addition to obtaining monetary settlement and injunctive relief, successful citizen plaintiffs usually also recover significant attorney fees.

Unlike the current permit, the draft permit explicitly incorporates the EPA benchmarks as enforceable limits on contaminants in stormwater discharge.  Initially, the benchmarks function as numeric action limits, meaning that certain detections of pollutants above the benchmarks act as “triggers” for corrective action, requiring the discharger to take specific steps – referred to as Level 1 corrective actions – to reduce contamination in stormwater discharge.  If the elevated detections reoccur in any subsequent year, the discharger must take Level 2 corrective action, which his also spelled out in some detail.  Notably, the draft permit explicitly states that “exceedances of the [numeric action limits] or [numeric action limit] triggers are not a violation of this General Permit.”

If the elevated detections occur in a third year, the facility reaches Level 3, which means that the numeric action limits become numeric effluent limits. Accordingly, any detection of a pollutant above the numeric effluent limits in a subsequent year is a de facto violation of the permit, which subjects the discharger to mandatory minimum penalties under California Water Code Section 13385.  This is a significant revision, as it will expose industrial facilities in California to enforceable stormwater effluent limits – and mandatory minimum penalties – for the first time.

The draft permit also includes a number of new and more stringent requirements for stormwater management and monitoring. For example, dischargers are required to implement specific minimum best management practices unless they are “clearly inapplicable,” and the permit increases the frequency of sampling required under the permit.  Some of these measures, such as the required revisions to the stormwater pollution prevention plan, must be implemented within 90 days after the draft permit is adopted by the State Board, and could prove expensive, particularly for large industrial facilities.

Perhaps the most important aspect of the draft permit is its potential impact on citizen suit litigation.  If the draft permit is adopted, can a citizen plaintiff file suit against a discharger for exceedances of a numeric action limit?  A numeric effluent limit?

The Clean Water Act allows a citizen plaintiff to file suit against a facility alleged to be in violation of an order or effluent standard or limitation. Under the express terms of the draft permit, the numeric action limits are not effluent standards or limitations, and a sample exceeding a numeric effluent limit is not a permit violation.  Therefore, dischargers will argue that any citizen suit based on exceedances of numeric action limits is meritless, because the discharger has not violated the permit.  If this argument succeeds in the courts, it would mean a facility can discharge pollutants in excess of EPA benchmarks for at least two years – while it is implementing Level 1 and Level 2 corrective action.  This result would be consistent with the State Board’s apparent intent to create a three-year period for facilities to achieve compliance with applicable limits.

With respect to numeric effluent limits, the question is different.  Pursuant to a principle known as the “diligent prosecution bar,” the Clean Water Act prohibits citizens from bringing suit against an alleged violator when either a federal or state government is “diligently prosecuting” an action against the discharger for the same violations.  Under existing case law, there is a good argument that the imposition of mandatory minimum penalties by the state for numeric effluent limit exceedances constitutes “diligent prosecution” that would bar a citizen suit – otherwise a discharger is effectively open to being penalized twice for the same exceedance.  It remains to be seen to what extent these revisions will curtail citizen suits, but the impact could be significant.

Donald E. Sobelman is a partner at Barg Coffin Lewis & Trapp LLP (www.bcltlaw.com), a San Francisco-based law firm specializing in environmental law and litigation. He can be reached at des@bcltlaw.com.

Kathryn L Oehlschlager is an associate at Barg Coffin Lewis & Trapp LLP (www.bcltlaw.com), a San Francisco-based law firm specializing in environmental law and litigation. She can be reached at klo@bcltlaw.com.

Originally published in the San Francisco Daily Journal, April 22, 2011. Copyright 2011 Daily Journal Corporation. Reprinted with permission.