November 01, 2016

State Courts vs. Federal Courts: Jurisdictional Battles over State Water Quality Standards

Roger Hanshaw

Since Congress adopted the Federal Water Pollution Control Act (Clean Water Act or CWA) in 1972 (33 U.S.C. § 1251–1387 (2012)), state and federal enforcement actions, along with citizen suits by private parties brought under the CWA, have done much to improve the quality of the nation’s waters. A key feature of the CWA is the system of cooperative federalism whereby states may voluntarily assume responsibility for enforcement of water pollution control laws under federally approved state programs. In order to exercise the primary jurisdiction for enforcement of water quality laws within its boundaries, a state must adopt a water quality permitting program and submit that program to the U.S. Environmental Protection Agency (EPA) for approval. After federal approval, the state environmental permitting and enforcement agency administers the federally approved program within the state’s borders with oversight from EPA. In order to gain federal approval, a state water quality program must have standards that are at least as stringent as those required by the federal government, but, importantly, a state may adopt a water quality program that is more stringent than required by federal law. When states choose to voluntarily demand greater protection for their waters than required by federal law, does the CWA still apply? And if it does, how far does the CWA authorize federal courts to go with respect to enforcing state-level standards?

Over 20 states have elected to develop their own state water quality programs and enforce the CWA at the state level. In these states, state water quality standards, and not the otherwise-applicable federal standards, are the typical basis for enforcement of the CWA. Enforcement actions undertaken by a state environmental regulatory agency or the EPA can be contentious, but they rarely give rise to a jurisdictional contest. Citizen suits, however, can create interesting questions of law with respect to the jurisdiction of the federal courts over suits to enforce state water quality standards when a state has enacted standards that exceed federal minimums. The CWA provides for citizen suit enforcement under 33 U.S.C. § 1365, which states, in part:

[A]ny citizen may commence a civil action on his own behalf . . . against any person (including (i) the United States, and (ii) any other governmental instrumentality or agency to the extent permitted by the eleventh amendment to the Constitution) who is alleged to be in violation of (A) an effluent standard or limitation under this chapter or (B) an order issued by the Administrator or a State with respect to such a standard or limitation. . . . (emphasis added).

A requirement for all citizen suits brought under 33 U.S.C. § 1365 is that the complainant allege a violation of an “effluent standard or limitation.” On its face, this seemingly innocuous requirement is easily satisfied. Where a permit authorizes discharge of a pollutant below a certain numerical threshold, any discharge in excess of that numerical threshold could be alleged to constitute a violation of an effluent standard or limitation. What happens, however, when a state has elected to enact water quality standards that are more stringent than those required by the federal government, or standards that are not tied to a numerical criterion? Such requirements are specifically authorized by the CWA in 33 U.S.C. § 1370. What happens when a state-issued national pollution discharge elimination system (NPDES) permit contains other provisions related to the permittee’s discharge that are qualitative? Do those parameters constitute an “effluent standard or limitation” for purposes of the citizen suit provision? These and other questions have surfaced in the context of suits filed by private parties seeking enforcement of state water quality standards under the CWA.

Across the nation, state legislatures and state environmental regulators are being increasingly pressured to enact ever-more stringent environmental protections. Historically, environmental advocacy organizations and private entities seeking to enforce the environmental laws throughout the country have relied, at least in part, on the citizen suit provisions of the federal environmental statutes, including the CWA. This time-tested approach has proven successful in situations where states have enacted environmental regulations that simply mirror their federal counterparts. However, as states move toward the implementation of environmental standards that are more stringent than required by the Clean Water Act, the role of the CWA citizen suit provision in 33 U.S.C. § 1365 continues to evolve.

The foundation for private enforcement of the Clean Water Act through citizen suits is the concept of an “effluent standard or limitation.” Under this provision, citizens are authorized to prosecute private lawsuits against those persons or entities who are alleged to be in violation of an effluent standard or limitation, meaning the person or entity either does not hold a valid NPDES permit from the federal government or a state environmental regulatory body, or is not acting in compliance with the terms of its permit. When the Clean Water Act was enacted in 1972, it was substantially easier to determine what constituted an effluent standard or limitation for purposes of citizen suits. In the early days of environmental enforcement, state and federal regulators focused on preventing traditional forms of pollution by eliminating the discharge of chemicals and other materials into the waters of the United States from industrial outfalls and traditional generators of chemicals or other commonly recognized pollutants. Over the past several years, however, the focus of Clean Water Act enforcement has broadened to include not only elimination of traditional forms of pollution, but also the enforcement of laws enacted throughout the nation to protect the nation’s waters in other ways. Among these laws are the now-familiar narrative water quality standards.

What Is an “Effluent Standard of Limitation”?

The federal courts have jurisdiction over citizen suits brought under 33 U.S.C. § 1365 as long as those suits are based on an alleged violation of an “effluent standard or limitation.” In cases where the alleged environmental wrong is other than a violation of an effluent standard or limitation, federal courts arguably lack jurisdiction to hear the claim under the CWA, leaving state courts as the proper forum for adjudication of these disputes. But how is a litigant to determine whether an alleged environmental complaint states a claim under the CWA as a violation of an effluent standard or limitation? A logical starting point would be the definition of “effluent limitation.” Under 33 U.S.C. § 1362(11), “effluent limitation” is defined as “any restriction established by a State or the Administrator on quantities, rates, and concentrations of chemical, physical, biological, and other constituents which are discharged from point sources into navigable waters, the waters of the contiguous zone, or the ocean, including schedules of compliance.” An important point in this definition is the phrase “discharged from point sources.” This definition suggests what many parties in CWA litigation have long argued—that “effluent limitation” for CWA purposes was intended to apply only to the concentration of discrete chemical species discharged from a point source. However, 33 U.S.C. § 1365(f) provides an expanded definition of “effluent standard or limitation” for purposes of the citizen suit provision. Under this definition, an “effluent standard or limitation” includes “a permit or condition thereof.” Where state-issued NPDES permits incorporate state water quality standards, including the narrative water quality standards now common throughout the nation, questions of enforceability of those permit conditions through citizen suits brought under 33 U.S.C. § 1365 can arise.

State water quality standards, even those promulgated by states in order to comply with the CWA, do not necessarily create requirements specifically enforceable under the CWA. In PUD No. 1 of Jefferson County v. Washington Department of Ecology, 511 U.S. 700 (1994), the Supreme Court held that a state water quality standard which mandated certain minimum stream flow requirements was an appropriate requirement under state law, and that states could enforce compliance with such a requirement as a condition to approval of a project when granting a state water quality certification under CWA § 401. However, such state water quality standards are not necessarily within the scope of the “effluent standards or limitations” for which the CWA confers jurisdiction for citizen suits.

To trigger the citizen suit provision of 33 U.S.C. § 1365, a discharge must emanate from a point source and violate an effluent standard or limitation. The fact that a discharge contributes to an overall violation of state water quality standards is not, by itself, actionable under the citizen suit provision of the CWA. For example, in Oregon Natural Resources Council v. United States Forest Service, 834 F.2d 842 (9th Cir. 1987), the Ninth Circuit held that a citizen group was authorized to proceed with a citizen suit under 33 U.S.C. § 1365 only to the extent that Oregon’s state water quality standards had been incorporated into an NPDES permit issued by the state of Oregon. The court held that it was the violation of a specific permit term, and not the general state water quality standard itself, that was actionable under the CWA. Similarly, in United States v. Hooker Chemicals & Plastics Corp., 749 F.2d 968, 979 (2d Cir. 1984), the Second Circuit recognized that the legislative history of the CWA confirmed that “[a]uthority granted to citizens to bring enforcement actions under this section [of the CWA] is limited to effluent standards or limitations established administratively under the [CWA].” S. Rep. No. 92-414, at 80 (1972), reprinted in 1972 U.S.C.C.A.N. 3668, 3670–4.

The distinction between water quality standards and effluent standards or limitations is more than academic. The federal courts have jurisdiction to hear cases arising under 33 U.S.C. § 1365, but this citizen suit provision is expressly limited to alleged violations of an effluent standard or limitation, which, under 33 U.S.C. § 1365(f), include permit conditions. However, under the system of cooperative federalism through which states enforce the CWA through their own EPA-approved state water quality programs, it is possible for states to issue NPDES permits that contain permit conditions unique to an individual state or more stringent than required by federal law. In those cases, are these permit conditions within the scope of the effluent standards of limitations envisioned for federal court enforcement under the CWA?

Federal Circuit Split over State Standards

The federal courts of appeals are divided on this question. In Atlantic States Legal Foundation v. Eastman Kodak Co., 12 F.3d 353 (2d Cir. 1993), the Second Circuit considered whether a citizen suit challenge could proceed under 33 U.S.C. § 1365 on the basis of an alleged violation of a state water quality standard without an alleged violation of a state-issued NPDES permit condition. Eastman Kodak was issued an NPDES permit by the state of New York, and although Eastman Kodak was in compliance with the terms of its permit, it also was discharging certain pollutants not specifically identified in the permit terms and conditions. Atlantic States Legal Foundation argued that since this discharge was not specifically authorized by Eastman Kodak’s permit, it amounted to a violation of New York’s state water quality standards and was therefore actionable under the citizen suit provision of 33 U.S.C. § 1365. The Second Circuit found that “state regulations, including the provisions of [NPDES] permits, which mandate ‘a greater scope of coverage than that required’ by the federal CWA and its implementing regulations are not enforceable through a citizen suit under 33 U.S.C. § 1365.” Id. at 360. As support for its position, the Second Circuit cited United States Department of Energy v. Ohio, 503 U.S. 607 (1992), in which the Supreme Court held that certain elements of an EPA-approved state water quality program did not “arise under federal law” simply because the program had received EPA approval, and therefore were not enforceable under the CWA.

The Second Circuit’s holding in Atlantic States Legal Foundation v. Eastman Kodak has been criticized, both for its breadth and for its focus on “arising under” jurisdiction. For example, in Parker v. Scrap Metal Processors, Inc., 386 F.3d 992, 1006 (11th Cir. 2004), the Eleventh Circuit asserted that “the Supreme Court apparently has incorporated state law standards under the CWA into federal environmental law for jurisdictional purposes.” In reaching this conclusion, the Parker court drew on EPA v. California, 426 U.S. 200, 224 (1976), where the Supreme Court, without specifically deciding the question, indicated that “more stringent standards and limitations established by a State” could serve as a basis for citizen suits under the CWA. Other circuits have joined the Eleventh Circuit in holding that citizen suits may be brought under the CWA even for violations of permit conditions that arise entirely under state law.

CWA vs. General Federal Question Jurisdiction

Others have criticized the Second Circuit’s holding in Atlantic States for its apparent reliance on the general federal question jurisdictional statute, 28 U.S.C. § 1331, rather than the more specific grant of jurisdiction found in 33 U.S.C. § 1365. These separate lines of criticism can, and should, be considered together. In Atlantic States, the Second Circuit reasoned that the citizen suit provision in § 1365 was intended to allow private citizens to seek enforcement of the terms of an NPDES permit. The court also noted that 33 U.S.C. § 1342(a) “specifies the requirements for suspending the national system with the submission of an approved state plan.” From this reasoning the court concluded that the citizen suit provision extended only to the enforcement of requirements that would exist under the federal NPDES permit program if the state program was not in place. The other federal circuit courts of appeal that have considered this question have taken the position expounded by the Eleventh Circuit in Parker, but the Second Circuit’s reasoning in Atlantic States will nevertheless remain relevant as states move toward adoption of state water quality standards that either exceed federal minimum requirements or simply have no federal counterpart.

The Narrative Water Quality Standards

In certain parts of the United States, especially those regions that historically have been home to a majority of the nation’s coal mining operations, states have begun to adopt narrative water quality standards that address conductivity. Conductivity is a general measure of the ability of a material, including a body of water, to conduct an electric current. Unlike lead, sodium, sulfate, chloride, or any of the other more traditional pollutants, conductivity is simply the end result of a measurement; it is not a distinct chemical or physical species, and therefore, arguably is not a pollutant. Under the CWA, it is unlawful to discharge a pollutant into the waters of the United States from a point source without a permit. However, is conductivity, as a general proxy for the total population of ionic species present in a body of water, within the definition of “pollutant” for purposes of the CWA? This and related questions remain without a definitive answer.

Many state-issued NPDES permits contain a catchall provision mandating that the permittee remain in compliance with all applicable state water quality laws. In states with adopted state water quality standards that address nonspecific “pollutants” like conductivity, these permit terms set up an interesting question of enforceability in the federal courts. On the one hand, compliance with the state water quality standard on conductivity is a “permit term or condition,” arguably making conductivity an enforceable parameter under 33 U.S.C. § 1365. Such reasoning comports with the Eleventh Circuit’s holding in Parker and the line of associated cases. However, on the other hand, there is no equivalent federal standard, conductivity is not a “pollutant” as that term is traditionally understood, and state water quality standards, as opposed to effluent limits, are arguably not enforceable under 33 U.S.C. § 1365. This reasoning aligns with the Second Circuit’s holding in Atlantic States. What is a federal court to do when faced with a citizen suit complaint under 33 U.S.C. § 1365 alleging a violation of a state water quality standard incorporated into a permit through a simple catchall provision? The federal courts are simply left to choose a side.

Despite the Second Circuit’s holding in Atlantic States, the momentum among the federal circuit courts of appeals appears to be in favor of the exercise of broad jurisdiction over citizen suits brought under 33 U.S.C. § 1365. As a recent example, consider Ohio Valley Environmental Coalition v. Fola Coal Co., 120 F. Supp. 3d 509 (S.D.W. Va. 2015), where the plaintiff alleged violations of both the CWA and the federal Surface Mining Control and Reclamation Act (SMCRA). The NPDES permit (and SMCRA mining permit) held by Fola Coal Company (Fola) contained a provision that mandated compliance with all state environmental laws, which is common to all such permits issued by the West Virginia Department of Environmental Protection. After considering this provision of Fola’s NPDES permit, the court concluded that it “must find a violation here if Defendant’s discharges cause or materially contribute to a significant adverse impact to the chemical or biological components of aquatic ecosystems.” Id. at 542. The provision cited by the court is a portion of West Virginia’s narrative water quality standards. See W. Va. Code R. § 47-2-3.2.i. It does not establish an effluent standard or limitation of any kind. Instead, it requires that a reviewing court assess the ecological health of an entire aquatic ecosystem and decide whether a permittee has caused an adverse impact on the chemical or biological components of the ecosystem. Such a determination appears far afield from the basic determination called for in 33 U.S.C. § 1365, where the CWA seems to suggest that a reviewing court’s jurisdiction would extend only to determining whether a defendant has discharged without a permit, or discharged pollutants in excess of allowable permit limits.

Conclusion

Enforcement of environmental laws, and indeed, environmental laws themselves, have become increasingly complex over the past decades. What was once primarily the realm of EPA and state environmental regulators is now occupied in significant part by private parties, including environmental advocacy organizations and other entities seeking to advance the cause of environmental protection in the United States. The concept of an “effluent standard or limitation,” though seemingly simple enough on its face, is emerging into a complicated calculus that must be undertaken with each new citizen suit. The terms and conditions that are now becoming a routine part of NPDES permits issued by state environmental regulators are increasingly being considered by federal district courts for jurisdictional purposes when determining whether a complaint alleges a violation of an “effluent standard or limitation.” State water quality standards are being modified, often at the invitation of EPA, to include parameters that are less readily amenable to traditional CWA enforcement efforts. Conductivity, turbidity, and similar measurement-based properties of a body of water do not fit nicely into the simple box drawn by the CWA labeled “pollutant,” yet the CWA is nevertheless the chosen vehicle for enforcement of these provisions of state water quality standards.

Environmental enforcement typically leaves little room for disagreement over jurisdictional issues when the enforcement action is undertaken by a government regulator, but unlike many other areas of the law, environmental enforcement can be, and increasingly is, done by private parties. For litigants in citizen suits, the specificity of the alleged violation is critical. A successful citizen suit plaintiff in federal court must first overcome any challenge to the court’s jurisdiction under 33 U.S.C. § 1365, which means convincing the court that a state water quality standard is enforceable as a permit term or condition. Although the courts have generally been receptive to such arguments, it is critical for plaintiffs and defendants alike not to lose sight of the Second Circuit’s holding in Atlantic States. Until the Supreme Court advises the environmental legal community otherwise, Atlantic States will remain a consideration that every citizen suit litigant must address when assessing whether federal jurisdiction exists over an alleged claim under the Clean Water Act.

Roger Hanshaw

Mr. Hanshaw is special counsel at Bowles Rice in Charleston, West Virginia. He may be reached at rhanshaw@bowlesrice.com.