Cooperative Federalism: Courts Get it Right in Nutrient Litigation

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In September, two federal court rulings reinforced NACWA’s long-held positions on cooperative federalism and EPA’s proper role in the total maximum daily load (TMDL) and water quality standard development process. Taken together, these two decisions paint a clear path forward for EPA to regulate nutrients in a holistic watershed manner that appropriately addresses nonpoint source contributions while also respecting the critical role of states in water quality protection.

In American Farm Bureau, et al. v. EPA – a challenge by agricultural interests to EPA’s inclusion of nonpoint sources as part of the final Chesapeake Bay TMDL – the plaintiffs argued that EPA was limited to establishing the maximum amount of nitrogen, phosphorus and sediment that could enter the Bay and that other actions such as setting waste load allocations constituted TMDL implementation, which was reserved to the states. The federal district court judge rejected these arguments. While she agreed that implementation is largely but not exclusively the responsibility of the states, she also ruled that EPA could take the lead role in setting the detailed allocations, including for nonpoint sources. The judge noted that the TMDL development process is an example of “cooperative federalism” and that it was “misleading” to suggest the allocations were set solely by EPA. Instead, the allocations were the result of considerable “back and forth” between the states and EPA, thus appropriately reflecting the shared role between EPA and the states in implementing Clean Water Act (CWA) requirements. In briefs filed with the court, NACWA addressed the question of where to draw the line between TMDL allocation-setting and implementation: dividing a water body’s assimilative capacity among sources of pollutants is the proper role of a TMDL and is necessary to adequately address all sources, which is the essence of the holistic, watershed approach. Within the context of a large watershed, and particularly an interstate watershed like the Chesapeake Bay, NACWA believes EPA can play an important and valuable role in setting specific allocations, especially for nonpoint sources. However, setting pollutant load allocations in a TMDL is not the same as dictating the means of implementing such allocations, which NACWA agrees is properly the role of states. The court’s ruling fortified NACWA’s interpretation on the matter.

Alternatively, the primary responsibility of states under the CWA for developing water quality standards – especially for numeric nutrient criteria (NNC) – was underscored by the September 20 ruling in Gulf Restoration Network, et al. v. EPA. This case addressed whether EPA is required under the CWA to make a determination on whether federal Numeric Nutrient Criteria are necessary for the Mississippi River Basin (MRB) and what factors EPA may consider in making such determination. The court reiterated that “the CWA is by design a states-in-the-first-instance regulatory scheme” with states being “charged with adopting water quality standards for their territorial waters “and EPA exercising oversight, “stepping in only when the states demonstrate that they either cannot or will not comply.” The court explained that “the necessity determination in §303(c)(4)(B) of the CWA is more than a mere speed bump on federal regulation because by design it serves as a hurdle to federal jurisdiction – a hurdle that EPA must overcome before it moves in to preempt a state’s sovereign authority to regulate its own waters.” This echoes NACWA’s longstanding position – as expressed in this case through briefing – that states must take the lead in developing water quality standards and criteria, especially with regard to the choice of NNC. Although the court directed EPA to ultimately make a clear determination about the need for federal NNC in the MRB, it also affirmed EPA’s broad discretion and ability to consider a wide variety of factors in making the determination.

By affirming the regulation of nutrients via a holistic watershed approach that encompasses nonpoint sources while acknowledging the crucial role each state plays in regulating and protecting its own water resources, the two rulings are significant for NACWA, its members, and its municipal partners as we continue to strive to equitably, cost-effectively and successfully address nutrients.

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