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© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Ohio Water Environment
Association
Government Affairs Committee Workshop
March 5, 2015
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Wastewater Litigation Update
Presented By:
Ted Boggs Vorys, Sater, Seymour and Pease LLP
614.464.8319 | [email protected]
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Federal Case
Sierra Club v. ICG Hazard – 6th Cir. Ct Appeals
• CWA §402 “Permit Shield” Case – January 2015
• Important for Citizen Suits
• Does permit shield extend to General Storm Water Discharge NPDES Permit?
• Thunder Ridge KY Coal Mine
• Selenium in Storm Water – No Permit Limit
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Sierra Club v. ICG Hazard Case
• 2-1 Decision – Held for the Coal Mine
• Followed Piney Run Preservation Decision
from 4th Circuit 2-Prong Test
• Permit Shield Appropriate When:
1. Express Terms of Permit are Complied With
2. Pollutant Within Reasonable Contemplation
by State at Time Permit was Issued
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Sierra Club v. ICG Hazard Case (cont’d)
• Mine Reported Detecting Selenium in
Accordance With One-Time Monitoring
Requirement for GP Coverage
• KY Then Required Continual Monitoring in a
Permit Modification
• Court Held Selenium Discharges From Coal
Mines Were Within KY’s Reasonable
Contemplation at Time GP Issued
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Sierra Club v. ICG Hazard Case (cont’d)
• KY has Since Modified Coal Mine WQSs
• Differences in GP and Individual Permit Applications Stand Out
• Holding Still Stands: Piney Run 2-Prong Permit Shield Test Applies to General and Individual NPDES Permits
• Alaska GP Case – Discharge of Coal Particles not Covered by GP; ACAT v. Aurora Energy (9th Cir. 2014) – Failed First Prong, so Shield not Allowed
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Ohio Supreme Court
NEORSD v. Bath Township
• NEORSD Established a Regional Stormwater
Management Program (RSM)
• Adopted Stormwater Fee to Fund the RSM
• Interpretation of Ohio Rev. Code Chapter 6119
Covering Regional Water and Sewer Districts
• Sewer District Filed Lawsuit to Have Court Declare
its Authority to Implement and Fund the RSM
• Three-Week Bench Trial – Over 24 Witnesses
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
NEORSD RSM Case
Trial Court Held:
• District Authorized Under R.C. 6119 and its Petition and Operations Plan to Address Regional Stormwater Problems
• Fee is Authorized by Statute
• Fee is not Restricted by the Petition/Plan
• Fee is not an Illegal Tax
• RSM Program Does not Violate U.S. or Ohio Constitutions
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
NEORSD RSM Case (cont’d)
• Ten-Member Communities/Large Property
Owners Appealed the Trial Court Decision
• Court of Appeals in 2-1 Decision Reversed
Major Parts of the Trial Court Decision:
― RSM Exceeds Authority Under R.C. 6119, the
Petition and Operations Plan
― Fee is an Unauthorized Charge
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
NEORSD RSM Case (cont’d)
• Dissent Filed – Very Well-reasoned
• Analyzes Plain Language of the Statute
• Concluded District has Authority Over Both: Stormwater and Sewage
• To Find Otherwise Creates Absurd Result Because if the Majority View was Followed, the District Would Only be Able to Manage Polluted Water if it was Mixed With Storm Water
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
NEORSD RSM Case (cont’d)
• Case has Been at OSC Since November 2013
• Oral Argument was in September 2014
• Lots of Amicus Briefs Filed for Both Sides
• Turns on Definition of “wastewater”
― “any storm water and any water containing
sewage or industrial waste or other pollutants
or contaminants derived from the prior use of
the water”
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
NEORSD RSM Case (cont’d)
• Majority in Court of Appeals Determined That in Order to Qualify as “wastewater” Storm Water Must be Mixed With Water Containing Sewage, etc.
• Does this Mean That No Dry Weather Flow is Allowed?
• Authority Just for Combined Sewage?
• Should the Definition be Read to be: (1) storm water or (2) any water containing sewage…?
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
NEORSD RSM Case (cont’d)
• Storm Water Fees Controversial
• Based on Impervious Surface of Property
• Is That a Rational Method and not
Discriminatory Against Small Lot Owners?
• Should it be a Voted Tax?
• Does the Fee Restrict Member Community
Rights to Operate Storm Water Utilities
Within Their Boundaries?
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
NEORSD RSM Case (cont’d)
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Ohio Supreme Court
Fairfield County v. Nally TMDL Case
• NPDES Permit Appeal – Tussing Road POTW – Discharges to the Blacklick Creek in Pickerington, Fairfield County, Ohio (3.0 MDG Design Q)
• Part of Big Walnut Creek Watershed - 40 Other Waterbodies in Watershed
• OEPA Determined Portions of BWC Impaired - TMDL Developed to Address Causes of Impairment
• OEPA Concluded Excessive Nutrients (Phosphorus) was Primary Cause of Impairment
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Fairfield County TMDL Case
• Maximum .11 mg/L Instream “Target Value” for the Entire Watershed
• Target Value: Technical Report: Association Between Nutrients, Habitat & Aquatic Biota in Ohio Rivers & Streams (1999)
• Reductions Allocated to PSs and NPSs
• PS Allocations Were First Calculated Using 1.0 mg/L Phosphorus Limit
• .5 mg/L Phosphorus Limit was Selected to Better Balance the PS-NPS Allocations and .5 was Considered a Technology-Based Standard
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Fairfield County TMDL Case (cont’d)
• Renewal Permit Included .5 mg/L Limit
• Estimated $5M Additional Equipment Needed
• Expert Testimony at ERAC From Both Sides
• ERAC Upheld TMDL – Based Permit Limit – But, Remanded to OEPA to Perform R.C. §6111.03(J)(3) Feasibility & Economic Reasonableness Test Which was not Done
• Court of Appeals Upheld ERAC – Appeal to Ohio Supreme Court
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Fairfield County TMDL Case (cont’d)
• Must a TMDL be Adopted Under State Law Rule-Making Procedures Before Target Values can be Imposed as NPDES Permit Limits?
• May OEPA Insert a TMDL-Based Limit Into a Permit Without Establishing a Good Scientific Connection Between the Discharge and Cause of Impairment?
• Or, is TMDL Approval by U.S. EPA Sufficient Valid Basis for the NPDES Permit Limit?
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Fairfield County TMDL Case (cont’d)
• Can the Technical Basis of Target Values or Other Conclusions in an U.S. EPA Approved TMDL be Challenged at ERAC as Part of an Appeal of a Permit Limit?
• Is Opportunity to Comment on a TMDL and a Challenge in Federal Court Sufficient Due Process Protection?
• Director’s Discretion Extend This Far?
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Fairfield County TMDL Case (cont’d)
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Munroe Falls Oil & Gas Case
• Municipal Ordinances Regulating O&G
• Criminal Sanctions
• Conflicted with State-wide Regulatory Scheme
• Home Rule Powers
• Cannot Discriminate Against, Unfairly Impede, or Obstruct O&G Activities Allowed by State
• Statute: Sole and Exclusive Authority to ODNR
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Munroe Falls Oil & Gas Case (cont’d)
• Split 4-3 Decision
• Stinging Dissents – Critical of General
Assembly (“Zookeeper Created to Feed the
Elephant in the Room”)
• Probably Helps Wastewater Industry –
Sludge Management, Treatment Plant
Locations, etc. Subject to State-wide
Regulatory Program and Issued Permits
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Ohio Court of Appeals
Oxford Mining Co. v. Nally
• January 22, 2015 – Franklin County Court of
Appeals
• Appeal from ERAC – CWA § 404/401 Dispute
• Wetlands Classification/Primary Headwaters
• Otsego I Proposed Coal Mine – 1100 acres
• Ohio Rapid Assessment Method (ORAM)
• Headwaters Habitat Evaluation Index (HHEI)
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Oxford Mining Case
• Application for 404 Permit and 401 WQC
• Consultant Performed Field Work
• OEPA Conducted its Own Field Work to Verify
• Ultimately a 401 WQ Certification was Issued
• Mitigation Plan Submitted for 5.82 ac Impacts
• Restore Streams With Natural Reconstruction Techniques and create 10.8 ac Wetlands
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Oxford Mining Case (cont’d)
• Impact to Some Streams Restricted – Required Demonstration That Streams Would Continue to Support May Flies
• Prohibited Impacts to Wetlands 71 and 72
• Required Construction to Cease Immediately if the Endangered Eastern Massasauga Rattlesnake or Native Muscles/Beds Encountered
• Authorized Only a Temporary Road Across Wetland 72
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Oxford Mining Case (cont’d)
• At ERAC Trial ORAM Manual Testimony
• Dispute Over Technical Scoring of Category 2 and 3 Wetlands
• Dispute Over use of Primary Head Water Habitat (PHHH) WQS Existing use Designation Which has not Been Adopted in the WQSs
• Dispute Over use of HHEI to Support an Existing use not in the WQSs
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Oxford Mining Case (cont’d)
Court of Appeals Holdings:
• OEPA did not Follow its Own ORAM Manual
• Proper for Appeals Court to Review Evidence for
Reliability – Includes an Inquiry Into Methods
Used and Whether Complete or not
• Cannot Defer to OEPA Interpretation When its
Plain Words or Explanations not Followed
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Oxford Mining Case (cont’d)
• When OEPA Does not Follow its Own
Methodology, the Result Cannot be Sure to
Yield an Accurate Result
• ERAC Decision not Supported by Reliable,
Probative and Substantial Evidence
• Moot: Whether Public Need was Properly
Determined Under Anti-degradation
© Copyright 2015, Vorys, Sater, Seymour and Pease LLP. All Rights Reserved.
Oxford Mining Case (cont’d)
• Even Though the Rattlesnake Provision was not Listed in the Notice of Appeal Specifically, the Issue was Adequately Raised During the Proceedings to put the Director on Notice
• Impacts to Endangered Species are Considered Under the Anti-degradation and WQC Rules
• Director has Authority to Impose Reasonable Restrictions Related to WQ Impacts Upon Endangered Species in a WQC