Early last week, in Iowa League of Cities v. EPA, No. 11-3412 (8th Cir.), the U.S. Court of Appeals for the Eighth Circuit determined that two letters from EPA to Senator Charles Grassley regarding water treatment processes at municipal sewage treatment plants, were really just thinly disguised regulations, which the Court proceeded to vacate.
The twin topics of the two letters were “mixing zones” and “blending.” Mixing zones are areas of surface waters where initial dilution of a discharge takes place and at which numeric water quality criteria may temporarily be exceeded. EPA’s regulations allow states to develop a policy on mixing zones in their water quality standards, although such a policy would remain subject to EPA review.
Blending is the act of channeling a portion of influent around biological secondary treatment units during wet weather events to avoid overwhelming the biological secondary treatment processes. The diverted flow passes through non-biological treatment units before it is reconstituted with the portion of influent that receives biological secondary treatment. When the combined output is discharged, it must meet the same permitted effluent limitations that ordinarily apply.
Blending highlights a tension between two existing EPA rules: the bypass rule and the secondary treatment rule. A bypass is an intentional diversion of a waste stream from a portion of a treatment facility. EPA’s regulations generally prohibit bypass unless there are “no feasible alternatives.” By requiring influent to move through the treatment process as it was designed to be operated, the bypass rule seeks to ensure that technology-based standards are satisfied.
EPA’s secondary treatment rule applies effluent limitations at the point of discharge into navigable waters, unless it would be impractical to do so, and precludes the imposition of any particular technology to achieve those effluent limitations.
EPA’s secondary treatment rule would appear to permit blending as long as effluent limitations were met at the end-of-the-pipe. In contrast, EPA’s bypass rule would appear to prohibit blending unless there were no feasible alternatives.
Because a number of cities in Iowa received mixed messages from EPA about whether and under what circumstances mixing zones and blending were permitted, they enlisted the help of Senator Grassley to obtain clarification from EPA.
EPA responded to Senator Grassley’s inquiries in two letters. In the first letter, EPA acknowledged that states may include mixing zone policies in their state water quality standards, but advised that bacteria mixing zones in waters designated for “primary contact recreation” (e.g., swimming, diving, water skiing) carry potential health risks and “should not be permitted.”
In the second letter, EPA stated that a diversion around biological secondary treatment and through auxiliary non-biological treatment is a bypass, and, as such, is prohibited under EPA’s bypass rule unless there are no feasible alternatives.
Apparently unhappy with EPA’s responses, the Iowa League of Cities sought direct appellate review of the two letters in the Eighth Circuit under the Clean Water Act.
The League argued that the letters effectively set forth regulatory requirements that could not be implemented without the notice and comment procedures for agency rulemaking. The League argued further that even if the rules had gone through the proper procedural channels, they were promulgated without valid statutory authority and should be struck down as ultra vires.
The Eighth Circuit agreed with the League on most counts. After ascertaining that it had jurisdiction under Clean Water Act section 509(b)(1)(E), that the matter was ripe for review, and that the League had standing to bring its claim, the Court turned to the merits of the procedural and substantive challenges.
With respect to the procedural challenge, the Court vacated both rules as procedurally invalid. The Court held that both letters had the effect of announcing legislative rules and that EPA violated the Administrative Procedure Act when it bypassed notice and comment procedures.
Regarding mixing zones, the Court found that EPA effectively removed the discretion of state permitting authorities to create their own policies regarding bacteria mixing zones in primary contact recreation areas and instead created a new effluent limitation that categorically forbids them.
Regarding blending, the Court found that EPA, by restricting the use of systems that do not include a biological component, effectively prescribed certain technologies as part of the secondary treatment phase. The Court also found that EPA would be imposing secondary treatment regulations on the two flows within the facility (the diverted flow and the flow receiving biological secondary treatment) rather than at the end-of-the-pipe where the recombined flows are discharged.
With respect to the substantive challenge to the blending rule, this latter finding proved fatal to EPA. In addition to vacating that rule as procedurally invalid, the Court vacated it “as in excess of statutory authority insofar as it would impose the effluent limitations of the secondary treatment regulations internally, rather than at the point of discharge into navigable waters.”
Because the Court found that the mixing zone rule was not so obviously precluded by text of the Clean Water Act, that rule survived a substantive challenge, at least for the time being. That challenge may be renewed if and when EPA seeks to reinstate the rule after curing the procedural defects identified by the Court.