March 01, 2014

The Ripple Effect: Underlying Currents in the Short Opinion in LA County Flood Control District v. NRDC

Marla Nelson

In January 2013 in Los Angeles County Flood Control District v. Natural Resources Defense Council, 133 S. Ct. 710 (2013) (LA County), the Supreme Court ruled that water flowing out of a concrete channel within a river does not constitute the “discharge of a pollutant” under the Clean Water Act (CWA). This outcome was easier to predict than most, given that all of the parties agreed on the answer to the question presented for review.

The case stemmed from a lawsuit filed by the Natural Resources Defense Council and Santa Monica Baykeeper (now LA-Waterkeeper) (collectively referred to herein as NRDC) that the County of Los Angeles and Los Angeles County Flood Control District (collectively referred to as the District) violated the CWA by discharging polluted stormwater from their municipal separate storm sewer system (MS4) in violation of the terms the National Pollutant Discharge Elimination System (NPDES) permit. Specifically, NRDC alleged that data showing exceedances of water quality standards, self-reported by the District, was sufficient to establish the District’s liability under the CWA. A confounding factor was that the District’s MS4 NPDES permit required monitoring at stations located downstream from the District’s MS4 discharge points that also happened to be downstream from various other permittees’ outfalls.

Following a curious opinion from the Ninth Circuit that seemed to misunderstand the conditions of the MS4 permit, the Supreme Court issued a short opinion on a single issue: whether water flowing through a man-made channel and back into a river can be characterized as a discharge. On remand, the Ninth Circuit Court of Appeals “reevaluate[d] and reject[ed]” the District’s arguments. Natural Res. Def. Council v. County of L.A., 725 F.3d 1194, 1210 (2013). The Ninth Circuit concluded that the District’s self-reported pollution exceedances were sufficient to establish the District’s liability for NPDES permit violations as a matter of law, based on the permit language. By accepting NRDC’s theory of strict liability for permit violations, the Ninth Circuit largely curtailed the import of the Supreme Court’s decision as applied to the specific facts of the case.

This article analyzes how the narrow question of what constitutes a jurisdiction-triggering discharge could make its way to the U.S. Supreme Court, despite the parties’ agreement on the issue and despite the fact that the Supreme Court had previously addressed the same issue in what was at least strong dictum. First, the article sets out the legal setting, factual background, and substance of the LA County decision. Next, it discusses the Ninth Circuit’s decision on remand, highlighting how a change of heart on a separate issue largely negated the impact of the Supreme Court’s ruling. The article then assesses a variety of misunderstandings that appeared throughout the litigation. Finally, with the benefit of hindsight, the article considers how the journey to and rulings by the Supreme Court might have been avoided.

A Complex Legal Setting

Consistent with the CWA’s goal to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters,” Section 301(a) prohibits the “discharge of any pollutant” from a “point source” into “navigable waters,” unless in compliance with certain other sections, such as the NPDES permit program. 33 U.S.C. § 1311(a). Although EPA initially ignored stormwater discharges under the NPDES permit program, Congress made the regulation of these discharges a priority under the 1987 amendments to the CWA. See Water Quality Act of 1987, Pub. L. No. 100-4, § 405, 101 Stat. 69 (codified at 33 U.S.C. § 1342(p)).

Under the CWA, medium and large MS4s, which service urban areas with populations of 100,000 or more, must obtain NPDES permits. Federal regulations define an MS4 as a publicly owned or operated “conveyance or system of conveyances” that discharges to waters of the United States. 40 C.F.R. § 122.26(b)(8). Where multiple entities operate an interconnected storm sewer system, an MS4 NPDES permit may be issued on a jurisdiction-wide basis. A co-permittee under a jurisdiction-wide permit is “responsible for permit conditions relating to the discharge for which it is the operator.” 40 C.F.R. § 122.26(b)(1).

Certain provisions apply to all NPDES permits. For example, a discharger must meet applicable water quality standards and monitor its discharges to determine compliance; monitoring must be representative of the monitored activity; and dischargers must self-report the monitoring results. Regulations that apply specifically to MS4 NPDES permits require MS4 permittees to monitor for compliance with permit conditions. Permittees also have a general duty to comply with the permit’s terms. See 40 C.F.R. § 122.

The complexities of the CWA increase in the context of MS4 discharges. As the Ninth Circuit stated on remand, there is an “inherent complexity [in] ensuring an [MS]4’s compliance with an NPDES permit that covers thousands of different point sources and outfalls.” 725 F.3d at 1208. The intricate and largely unknown network of the Los Angeles MS4 system, combined with the hundreds of public and private entities that discharge to the Los Angeles and San Gabriel Rivers upstream from the monitoring stations, likely exacerbated these complexities.

The California State Water Resources Control Board for the Los Angeles Region (California Regional Board) implements the CWA NPDES program in Los Angeles County. In 2001 the California Regional Board adopted the MS4 NPDES permit at issue in LA County. The seventy-seven-page MS4 permit authorized the District and eighty-four incorporated cities to discharge stormwater to local waterways.

Two sections of the District’s MS4 permit were the focus of the litigation in LA County. First, the section titled “Receiving Water Limitations” prohibited “discharges from the MS4 that cause or contribute to the violation of the Water Quality Standards or water quality objectives.” Water quality standards are typically maximum pollutant levels expressed in numeric or narrative form, established to protect public health and enhance water quality.

Second, a self-monitoring program required the District to assess its compliance with the permit, measure and improve the effectiveness of its stormwater management program, and assess the environmental impact of urban runoff. The permit required monitoring at mass-emissions stations in the Los Angeles and San Gabriel riverbeds, located downstream from the District’s MS4 outfalls and outfalls controlled by other permittees. These stations measured all constituents present in the water, creating a cumulative picture of the pollutant load in the river. The stated goals of the monitoring stations were to estimate mass emissions from the MS4, assess trends in the emissions, and determine if the MS4 was contributing to exceedances of water quality standards.

Route to the Supreme Court

In March 2008, NRDC filed suit against the District, alleging violations of several provisions of the MS4 NPDES permit based in part on the District’s self-reported monitoring data. Between 2002 and 2008, the District’s annual monitoring reports identified 140 exceedances of water quality standards in the Los Angeles River and San Gabriel River. The District did not dispute the accuracy of the data. In September 2009, NRDC moved for partial summary judgment on, inter alia, the District’s liability for contributing to exceedances of water quality standards in the Los Angeles River, the San Gabriel River, the Santa Clara River, and Malibu Creek watersheds. The District filed a cross-motion for summary judgment.

In March 2010, the district court denied both motions. 2010 WL 761287 (C.D. Cal. 2010). The district court declined to hold the District liable, despite the undisputed facts that (1) the District’s MS4 permit prohibited discharges that cause or contribute to a violation of water quality standards, (2) the District’s self-reported mass-emissions data demonstrated violations of water quality standards, and (3) the District’s permit established that any permit violation is a violation of the CWA.

The district court recognized that the District need not be the sole cause of the exceedances shown in the monitoring data. Yet the court explained that the data from monitoring stations located within the MS4 owned and operated by the District “does not necessarily determine the question of whether the water passing by these points is a ‘discharge.’” 2010 WL 761287 at *7. This was the first unnecessary complication. As explained below, a discharge is a necessary element for requiring an NPDES permit, but a permit holder may violate the terms of an NPDES permit in many ways that do not involve an actual discharge. This brought about the second unnecessary complication: determining where the actual discharge occurred. As the district court explained in its 2010 decision, “the record before the Court does not show where the MS4 ends and either River begins.” 2010 WL 761287 at *7. The fact that the District had an NPDES permit should have foreclosed the questions of whether and where there was a discharge.

The district court reasoned that the self-reported monitoring data was insufficient to establish the District’s liability because the monitoring stations were located downstream from the District’s MS4 outfalls and the data potentially included pollutants from numerous other MS4 users. In rejecting NRDC’s theory that the self-reported exceedances establish permit violations as a matter of law, the district court relied on a permit provision that made a permittee “responsible only for a discharge for which it is the operator.” Because NRDC failed to prove that the District itself had discharged pollutants that caused or contributed to a violation of water quality standards in the vicinity of the monitoring stations, the district court denied NRDC’s motion for partial summary judgment. Likewise, the district court denied the District’s cross motion because the District failed to present evidence that the standards-exceeding pollutants did not pass through its MS4 outfalls.

After ordering supplemental briefing, the district court granted partial summary judgment to the District. The district court reiterated that NRDC failed to present evidence that the standards-exceeding pollutants passed through the District’s upstream MS4 outfalls at or near the time the exceedances were observed at the downstream monitoring stations.

On appeal, the Ninth Circuit affirmed the district court’s judgment in part and reversed in part. The Ninth Circuit agreed with the district court that although the monitoring exceedances established permit violations, “the Clean Water Act does not prohibit ‘undisputed’ exceedances; it prohibits ‘discharges’ that are not in compliance with the Act.” Natural Res. Def. Council, Inc. v. Cnty. of L.A., 673 F.3d 880, 898 (2011). (emphasis in original). Focusing on the specific permit language prohibiting “discharges from the MS4 that cause or contribute to the violation of the Water Quality Standards or water quality objectives,” the Ninth Circuit determined that a factual question remained as to whether the District’s MS4 discharged pollutants to the watershed rivers. Id. at 898–99.

The Ninth Circuit then made a curious shift in its reasoning. See Petition for Writ of Certiorari, 2011 WL 4874090, *16 (noting that “the Ninth Circuit’s opinion adopted a theory of liability that had not been briefed by the parties”). The court explained that because the mass-emissions stations were located in a section of the MS4 owned and operated by the District, “when pollutants were detected, they had not yet exited the point source into navigable waters” because “[a]s a matter of law and fact, the MS4 is distinct from the two navigable rivers.” 673 F.3d at 899. In a statement that NRDC and the United States would later attribute to factual misunderstanding, the Ninth Circuit stated that “[t]he discharge from a point source occurred when the still-polluted stormwater flowed out of the concrete channels where the Monitoring Stations are located, through an outfall, and into the navigable waterways.” Id. at 900.

Based on the misunderstanding that the monitoring stations were located at the point where the District’s MS4 discharged into the Los Angeles River and San Gabriel River, the Ninth Circuit concluded that the District was violating the permit terms for those rivers. This reasoning was especially surprising given existing Ninth Circuit precedent. For example, in Sierra Club v. Union Oil Co., the Ninth Circuit determined that self-monitoring reports are “conclusive evidence of an exceedance of a permit limitation.” 813 F.2d 1480 (9th Cir. 1987). Whether due to a misunderstanding of fact or law, this confusing reasoning laid the groundwork for the Supreme Court’s review.

The District then filed a petition for writ of certiorari, identifying two questions: (1) whether “navigable waters of the United States” include only “naturally occurring” bodies of water and not man-made improvements, and (2) whether there is a “discharge” when water flows from one portion of a river that is a navigable water of the United States, through a concrete channel or other engineered improvement, into a lower portion of the same river. The District argued the Court of Appeals’ conclusion, that there is a discharge when water passes from a channelized portion to an unimproved portion of a river, was in direct conflict with the Supreme Court’s opinion in South Florida Water Management District v. Miccosukee Tribe of Indians. 541 U.S. 95, 105 (2004) (Miccosukee) (embracing the idea that the transfer of water within a single body of water cannot constitute a “discharge” for purposes of the CWA). The District repeatedly cited to the regulatory confusion that would result from the Ninth Circuit’s reasoning as justification for Supreme Court review.

In June 2012, the Supreme Court granted the District’s petition for writ of certiorari on the second question of whether water flowing out of a concrete channel within a river constitutes the discharge of a pollutant. Upon reaching the merits, Justice Ginsburg, writing for a unanimous Court in LA County, addressed the straightforward question presented in just five pages. Affirming the water transfer concept from Miccosukee, the Court reversed the Ninth Circuit’s judgment and remanded. At the same time, the Court carefully and expressly limited the breadth of its opinion, stating “[w]e . . . indicate no opinion on” NRDC’s theory of strict liability resulting from permit violations. 133 S. Ct. at 714.

About Face

Perseverance is defined as, inter alia, “steadfast pursuit of an aim, especially in the face of difficulty or delay.”

Oxford English Dictionary

On remand, NRDC again presented the strict liability theory that it had argued from the start: exceedances of water quality standards as demonstrated by self-reported compliance monitoring data establish the District’s liability as a matter of law. NRDC had advanced this theory at every stage of the litigation without success. This time, however, the Ninth Circuit agreed.

A comparison of the Ninth Circuit’s decisions in 2011 and 2013 reveals a change of heart by the court, based largely on textual interpretation of the permit terms. The 2011 opinion considered both (1) whether an exceedance at a mass-emissions station is a violation of the permit, and (2) whether the evidence demonstrated the District discharged pollutants that caused or contributed to those water quality standard exceedances. In 2013, however, the same panel focused on what NRDC was required to show to establish liability under the specific terms of the NPDES permit.

Instead of requiring NRDC to present evidence that the District discharged stormwater containing pollutants that caused or contributed to exceedances of water quality standards, this time the Ninth Circuit focused on the fact that an NPDES permit “may instead establish a monitoring scheme ‘sufficient to yield data which are representative of the monitored activity. . . .’” 725 F.3d at 1209 (quoting 40 C.F.R. § 122.48(b)) (emphasis in opinion). Because the District had certified in its NPDES permit that the data collected at the mass monitoring station locations would be representative of its activities, the Ninth Circuit determined that the exceedances established the District’s liability for permit violations as a matter of law.

The finality of the Ninth Circuit’s 2013 decision remains to be seen. On January 24, 2014, the District filed a petition for writ of certiorari to the Supreme Court, arguing that (1) principles of finality barred the Ninth Circuit from rehearing NRDC’s strict liability theory on remand, and (2) proof of a discharge is necessary to establish an individual co-permittee’s liability under an MS4 NPDES permit.

Once more, on January 24, 2014, the District filed a petition for writ of certiorari to the Supreme Court arguing that principles of finality barred the Ninth Circuit from rehearing NRDC’s strict liability theory on remand, and proof of a discharge is necessary to establish an individual co-permittee’s liability. On May 5, 2014, the Supreme Court denied the request; the Ninth Circuit’s decision on remand stands.

A Look Back

A review of the briefing and court decisions reveals that certain underlying issues were consistently the source of misunderstanding or miscommunication throughout each stage of litigation. For example, the district court and Ninth Circuit grappled with the disparity between the legal standard set forth in an NPDES permit and the practical realities of stormwater discharges in a multipolluter scenario. Another example is the distinction between the elements that trigger the need to obtain an NPDES permit and the elements required to prove a violation of an NPDES permit. Finally, the propriety of Supreme Court review of a less than clear Court of Appeals decision became an issue in the later stages of litigation.

Turning to the first issue, there is often a gap between legal standards and scientific or practical realities. In the context of the CWA, NPDES permit provisions bridge that gap by providing a firm standard for compliance. The technical issue in this case was that the monitoring data did not assess the pollutants in the discharges of any individual permittee at the actual point of outfall, but rather collected data on the presence of pollutants in rivers where there were upstream discharges from various entities. The gap was therefore the difference between the monitoring station data, which represented potentially numerous sources, and the unknown nature of the discharges from the District’s outfalls. The District presented this “multiple polluter” problem as a defense to liability.

NRDC argued that the strict liability scheme under the CWA and the duty to comply with NPDES permit provisions foreclosed the sticky factual questions presented by the District’s defense. The legislative history supports this understanding. See, e.g., S. Rep. No. 92-414, 61, 92d Cong., 1st Sess. 64 (explaining that “[e]nforcement of violations of requirements under this Act should be based on relatively narrow fact situations requiring a minimum of discretionary decision making or delay”). Thus, because the terms of the District’s MS4 NPDES permit based the County’s compliance on data from mass-emissions stations, the exceedances shown in the data should have been sufficient. Consequently, recognition of the permit’s plain language in combination with the CWA’s strict liability scheme may have avoided the factual questions that led to the Supreme Court’s review.

The second issue underlying much of the litigation is the difference between the requirement to obtain an NPDES permit and the requirement for a permit holder to comply with the permit’s terms. In its petition for certiorari, the District explained that the district court had determined “for there to be a discharge for which the petitioner District could be liable, it was necessary that water be discharged from a ‘point source,’” citing Miccosukee. But in Miccosukee the Supreme Court addressed whether there was a discharge when a water management district pumped polluted water from a canal into an undeveloped wetland such that the district would need to obtain an NPDES permit. The Court in Miccosukee concluded that the CWA only requires a permit if there is an addition of a pollutant to navigable waters. 541 U.S. at 106. The question in Miccosukee was not, as it was in LA County, whether the management district was acting in compliance with its NPDES permit. In LA County, the District already had an MS4 NPDES permit precisely because it discharged stormwater to navigable waters. See also Envtl. Def. Ctr. v. EPA, 344 F.3d 832, 841 (9th Cir. 2003) (“Storm sewers are established point sources subject to NPDES permitting requirements.”).

Once an MS4 triggers the jurisdictional requirements subjecting it to the CWA (discharges a pollutant from a point source to a navigable water) and the MS4 obtains an NPDES permit, the MS4 has a duty to comply with the terms of that permit. 40 C.F.R. § 122.41(a). This is true even for actions not involving discharges themselves, such as the requirement to submit accurate monitoring reports. There is no discharge involved in the submission of a monitoring report, yet failure to do so constitutes a violation of the permit and a violation of the Act.

The district court’s decision and Ninth Circuit’s 2011 decision focused on the specific permit language to conclude that a discharge was necessary to show that the District violated the specific term prohibiting discharges that cause or contribute to the exceedance of a water quality standard. Although the Ninth Circuit agreed with NRDC’s argument that the monitoring exceedances establish permit violations, it went on to state that “responsibility for those exceedances requires proof that some entity discharged a pollutant.” 673 F.3d 880, 898. The Supreme Court explicitly avoided this issue, providing room for the Ninth Circuit’s decision in favor of NRDC on remand.

Finally, the Supreme Court’s review of such a narrow question raised several interesting concerns. The case essentially lacked an issue, since both parties and the United States agreed that the sole question presented for Supreme Court review should be answered in the negative. Many believed the Court had determined that a water transfer does not constitute a discharge almost ten years prior in Miccosukee. A Supreme Court ruling that addresses a question agreed upon by all of the parties flies in the face of the Constitutional requirement for a case or controversy. In fact, NRDC and the United States maintained that the question presented was not an issue in the case but rather the Ninth Circuit had misunderstood the facts. During oral argument, the Court did not focus on the question up for review, but on how the Court should resolve the case.

Given the lack of briefing on the question presented in the context of a statute that intricately weaves various permit programs, perhaps the Court could have forgone consideration of the question entirely. Alternatives included dismissing the writ of certiorari as “improvidently granted” or vacating the judgment by the Court of Appeals and remanding for further proceedings.

Perhaps it was better for the Court to correct the Ninth Circuit’s reasoning. See 133 S. Ct. at 713 n.1 (noting that “[w]hatever the source of the Court of Appeals’ error, all parties agree that the court’s analysis was erroneous”). As the District noted, the Supreme Court has corrected gross factual errors by the Ninth Circuit in the past. See, e.g., Cavazos v. Smith, __ U.S. __ , 132 S. Ct. 2, 7 (2011) (reversing and noting that a factual assertion in the Ninth Circuit’s opinion “is simply false”). Ultimately, however, the Supreme Court’s decision did little to clarify the complexities of MS4 liability under the CWA.

Marla Nelson

Ms. Nelson is the Legal Fellow at the Northwest Environmental Defense Center.