In the Matter of the CITIES OF ANNANDALE AND MAPLE LAKE NPDES/SDS PERMIT ISSUANCE FOR the DISCHARGE OF TREATED WASTEWATER, and Request for Contested Case Hearing.
No. A04-2033.
Court of Appeals of Minnesota.
Aug. 9, 2005.
731 N.W.2d 502
BY THE COURT: /s/Kathleen A. Blatz Chief Justice
Mike Hatch, Attorney General, Stephanie Morgan, Assistant Attorney General, St. Paul, MN, for respondent Minnesota Pollution Control Agency.
Edward J. Laubach, Jr., Christopher W. Harmoning, Heather I. Olson; Gray, Plant, Mooty, Mooty & Bennett, P.A., St. Cloud, MN, for respondents Cities of Annandale and Maple Lake.
Considered and decided by PETERSON, Presiding Judge; SCHUMACHER, Judge; and WRIGHT, Judge.
OPINION
WRIGHT, Judge.
Respondents City of Annandale and City of Maple Lake applied for a permit for a new wastewater-treatment plant, the discharge from which would flow into waters with impaired status under the Clean Water Act. The Minnesota Pollution Control Agency granted the permit. Relator Minnesota Center for Environmental Advocacy challenges the permit, asserting that the new source of discharge would contribute to the impairment of waters
FACTS
For its wastewater treatment, the City of Annandale currently utilizes a pond system with spray irrigation that does not discharge phosphorus directly into a body of water. The City of Maple Lake currently utilizes a mechanical plant for its wastewater treatment. This wastewater plant discharges into Mud Lake, which later flows into the North Fork of the Crow River (the North Fork). Approximately 1,400 pounds of phosphorus are discharged from this plant each year.
Respondents City of Annandale and City of Maple Lake (the Cities) jointly submitted plans for a new wastewater-treatment plant in late 2002. The proposed plant will discharge 3,600 pounds of phosphorus into the North Fork each year, 2,200 pounds greater than the phosphorous discharged by the Cities’ existing wastewater-treatment facilities. The North Fork flows into the Mississippi River and contributes to the Lake Pepin watershed.
Section 303(d) of the federal Clean Water Act provides that, when a designated body of water does not meet water quality standards due to an excessive level of a pollutant or lax controls over thermal discharges, a state environmental agency shall identify it as an impaired water and establish a priority ranking for the body of water.
Pursuant to the plans for the plant, on July 25, 2003, the Cities submitted an application for a National Pollutant Discharge Elimination System (NPDES) permit to the PCA for the proposed wastewater-treatment plant. The PCA gave due notice of the application and, with its request for public comment, submitted a proposed draft of the NPDES permit. The draft NPDES permit placed several limits on the plant‘s discharge, including a maximum level for phosphorus and a minimum level for dissolved oxygen.
Relator Minnesota Center for Environmental Advocacy (MCEA) submitted comments on July 21 and August 18, 2004. The MCEA claimed that additional phosphorus from the plant would contribute to the low dissolved-oxygen levels on the North Fork and excessive nutrients in Lake Pepin. Asserting that federal regulations do not allow a new source to cause or contribute to the impairment of Section 303(d) waters, the MCEA argued against issuance of the NPDES permit.
Following a public hearing, the PCA addressed the comments of the MCEA and recommended approval of the NPDES permit in its order dated September 28, 2004. The PCA interpreted the federal regulations to provide that, if a new source contributes to the impairment of Section 303(d) waters, but the aggregate impairment of those waters is reduced by improvements elsewhere, a NPDES permit may be issued for the new source. The PCA concluded that the 2,200-pound in-
Regarding the impact of the phosphorus discharge on dissolved oxygen in the North Fork, the PCA observed that the impaired section of the North Fork is 17.9 miles downstream from the discharge point for the Cities’ proposed plant. Relying on an internal study, the PCA found that dissolved oxygen is most severely affected 1.8 miles downstream from the discharge point. The PCA then concluded that the discharge would not contribute to the impairment of the North Fork.
On September 30, 2004, the PCA then adopted the proposed draft and issued the NPDES permit. This appeal followed.
ISSUE
Does a discharge of phosphorus from a new source contribute to the impairment of Section 303(d) waters, in violation of
ANALYSIS
Appellate review of an agency decision ordinarily is governed by the Minnesota Administrative Procedure Act, which provides in relevant part:
In a judicial review ... the court may affirm the decision of the agency or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the petitioners may have been prejudiced because the administrative finding, inferences, conclusion, or decisions are:
. . . (d) [a]ffected by other error of law[.]
The MCEA challenges the PCA‘s interpretation of
No permit may be issued: . . . [t]o a new source or a new discharger, if the discharge from its construction or operation will cause or contribute to the violation of water quality standards. The owner or operator of a new source or new discharger proposing to discharge into a water segment which does not meet applicable water quality standards or is not expected to meet those standards even after the application of the effluent limitations required by [Section 301(b)] of [the] CWA,2 and for which the State or interstate agency has performed a pollutants load allocation for the pollutant to be discharged, must demonstrate, before the close of the public comment period, that:
(1) There are sufficient remaining pollutant load allocations to allow for the discharge; and
(2) The existing dischargers into that segment are subject to compliance schedules designed to bring the segment into compliance with applicable water quality standards.
MCEA argues initially that the regulation requires a TMDL to be established
Our construction of
In reaching its decision, the Crutchfield court addressed the same argument advanced here, that a permit could not issue in the absence of a TMDL for the river. Because the latter portion of the regulation governs only new sources that “discharge into a water segment which does not meet applicable water quality standards ... and for which the [State] has performed a pollutants load allocation,” the Crutchfield court held that this requirement did not attach until a TMDL was established. Id. at 255 (emphasis added). Thus, as we conclude here, in the absence of a TMDL, a permit may issue to a new source that does not otherwise cause or contribute to an impairment of waters with impaired status.
MCEA counters that the meaning of the phrase “water quality standards,” as recited in the first sentence of the regulation, must be determined in accordance with a TMDL. But in first determining whether waters receive a Section 303(d) listing, water-quality standards other than a TMDL are necessarily employed. See
Here, the PCA found that discharge from the Cities’ proposed plant would not affect dissolved-oxygen levels on the impaired portion of the North Fork.3 We conclude that the PCA was not barred as a matter of law from issuing a permit because of the impact of the Cities’ proposed
MCEA next challenges the conclusion of the PCA that phosphorus in the proposed discharge will not cause or contribute to the excessive nutrient impairment of Lake Pepin. The PCA found that the proposed plant will increase the annual phosphorus discharge into the North Fork from 1,400 to 3,600 pounds. Because it does not break down into smaller components, phosphorus persists in a watershed to a greater degree than other pollutants. Thus, the PCA concedes that this phosphorus will affect the Lake Pepin watershed. But the PCA asserts that, because of a reduced phosphorus discharge from other sources, the proposed plant will not contribute to higher phosphorus levels.4 This reduced discharge from other sources, however, does not rectify the violation of water-quality standards.
We note that a system of offsets akin to the rationale offered by the PCA was proposed by the Environmental Protection Agency (EPA) five years ago when it last considered revisions to
EPA also concluded that the additional environmental benefits from the offset requirement, in many cases, would have been minimal at best.... The offset requirement would have been a requirement over and above the requirements under current NPDES permitting regulations at [§ 122.4(i)] .... For those dischargers who would have been subject to the offset requirement, consistent implementation of [these regulations] following existing EPA guidance would result in permits, if issued, containing limits and conditions for the pollutants of concern that derive from and comply with applicable water quality standards.... EPA believes that progress toward the attainment of water quality standards prior to a TMDL would be achieved through consistent implementation of EPA‘s existing regulatory authorities.
Id. at 43,641. Were we to assume that the language in
A plain reading of the phrase “cause or contribute to the violation of water quality standards” indicates that, so long as some level of discharge may be causally attributed to the impairment of Section 303(d) waters, a permit shall not be issued. Here, the record demonstrates that, notwithstanding the reduction in phosphorus resulting from other sources, the waters at issue remain impaired. And the amount of phosphorus discharged into the North Fork from the proposed wastewater-treatment plant, which is more than double the current phosphorus level of 1,400 pounds per year, will contribute to impaired nutrient levels in Lake Pepin. We, therefore, conclude that the PCA erred as a matter of law when it issued a permit for the Cities’ proposed plant.
In doing so, we reject the PCA‘s argument that, if
Even though an Administrative Law Judge (ALJ) concluded that the proposed discharge would have no measurable effect on the scenic waterway, the Tenth Circuit disallowed the permit. Id. at 97-98, 112 S. Ct. at 1052. The Tenth Circuit relied exclusively on Section 402(h) of the Clean Water Act, which provides that when a municipal discharge source violates the terms of an NPDES permit, the EPA or a state environmental agency may seek to restrict or prohibit discharge from that source.
The United States Supreme Court reversed the decision of the Tenth Circuit and reinstated the permit. Even though the water quality of the river was in violation of state anti-degradation standards, the Arkansas court did not observe any legal impediments to the issuance of a permit:
Although the Act contains several provisions directing compliance with state water quality standards, the parties have pointed to nothing that mandates a complete ban on discharges into a waterway that is in violation of those [state] standards.... Thus, rather than establishing the categorical ban announced by the Court of Appeals—which might frustrate the construction of new plants that would improve existing conditions—the Clean Water Act vests in the EPA and the States broad authority to develop long-range, area-wide programs to alleviate and eliminate existing pollution.
Arkansas is distinguishable in several respects from the instant case. The ALJ in Arkansas determined that the proposed source had no measurable impact on the scenic waterway. Here, the PCA determined that the Cities’ proposed source has a measurable impact on the Section 303(d) impairment factors for the North Fork and the Lake Pepin watershed. Arkansas also did not consider Section 303(d) or its attendant regulations for the issuance of permits, such as
Even though we conclude that
DECISION
Because the discharge from the Cities’ proposed plant would contribute to the impairment of Section 303(d) waters, the PCA erred by issuing a permit in violation of
Reversed.
ROBERT H. SCHUMACHER, Judge (dissenting).
I respectfully dissent. I agree with the majority that
But I disagree with the majority‘s conclusion that the PCA erred by interpreting
The majority rejects the PCA‘s interpretation of section 122.4(i), which provides that no permit will issue if a new discharger will “cause or contribute to the violation of water quality standards.” The PCA interpreted this provision as authorizing an additional annual phosphorus discharge of 2,200 pounds to the Lake Pepin watershed where agency findings showed
The majority first declines to give deference to the PCA‘s interpretation of the regulation on the grounds that a state agency‘s construction of federal law presents a legal question, which this court reviews de novo. Although it is axiomatic that this court is free to exercise its independent judgment when reviewing questions of law, I believe that reviewing the PCA‘s interpretation de novo disregards the “fundamental concept that decisions of administrative agencies enjoy a presumption of correctness, and deference should be shown by courts to the agencies’ expertise and their special knowledge in the field of their technical training, education, and experience.” Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 824 (Minn. 1977). The agency decision-maker is presumed to have the expertise necessary to decide technical matters within the scope of the agency‘s authority, In re Special Instruction & Servs. for Pautz, 295 N.W.2d 635, 637 (Minn. 1980), and judicial deference, rooted in the separation of powers doctrine, is extended to an agency decision-maker in the interpretation of statutes that the agency is charged with administering and enforcing. Krumm v. R.A. Nadeau Co., 276 N.W.2d 641, 644 (Minn. 1979); In re Max Schwartzman & Sons, Inc., 670 N.W.2d 746, 754 (Minn. App. 2003).
The PCA is charged by state and federal law with administering the CWA and its attendant regulations.
The majority also declines to defer to the PCA‘s interpretation of the regulation because it is based upon an Environmental Protection Agency (EPA) interpretation submitted in a brief to federal district court. Because the “cause or contribute” language at issue here is reasonably susceptible to different interpretations—as evidenced by the meritorious opposing constructions advanced by both parties—the EPA‘s interpretation would typically be entitled to “considerable deference.” St. Otto‘s Home v. Minnesota Dept. of Human Servs., 437 N.W.2d 35, 40 (Minn. 1989). The majority states that “[w]here an agency‘s representations in the course of litigation are not based on its previous decisions or administrative practice, and thereby lack a sound basis, the representations cannot be used to determine the meaning of a regulation, because they may constitute a rationalization after the fact,” relying upon Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 212, 109 S. Ct. 468, 473-74, 102 L. Ed. 2d 493 (1988), and Nat‘l Wildlife Fed‘n v. Browner, 127 F.3d 1126, 1129-30 (D.C. Cir. 1997).
But Bowen does not categorically reject agency litigating positions as interpretive guides; it only states that courts should not defer to those positions where they
The EPA brief upon which the PCA relies here describes the offset system as an agency “practice,” and, as the majority observes, the EPA itself proposed a rule requiring offsets when it last considered revisions to section 122.4(i) in 2000. Because the record demonstrates that the EPA‘s litigation position reflected an administrative practice, and was not a post hoc rationalization advanced for the first time on appeal, I do not believe that Bowen and Browner preclude the PCA‘s reliance upon the EPA‘s brief in interpreting section 122.4(i).
Finally, the majority discounts the PCA‘s interpretation of the regulation because in 2000, the EPA considered and rejected a proposed “system of offsets akin to the rationale offered by the PCA.” For two reasons, I do not believe the EPA‘s earlier action compels the conclusion that the PCA may not interpret the regulation as permitting offsets here. First, the 2000 proposal would have required new dischargers nationwide to offset new-pollutant loading by “securing reductions in the loading of the same pollutant from an existing source(s) located on the same waterbody.” Revisions to the Water Quality Planning Regulation & NPDES Program, 65 Fed. Reg. 43,586, 43,639 (E.P.A. July 13, 2000). The EPA rejected the proposal as practically “unworkable” both because of the likely impossibility of always finding a source in a given waterbody “from which an offset might be obtained” and because a national-scale, “one size fits all” approach to regulation would “undercut State primacy in determining what actions are necessary to attain water quality standards.” Id. at 43,639-40.
These problems are not present here. The offset source has already been identified and permitted, and the PCA is acting in the state‘s interest to improve water quality, not in compliance with a federal mandate. I do not believe the EPA‘s earlier rejection of the offsets requirement is dispositive as to the PCA‘s interpretation of the regulation. Second, I do not believe that the EPA‘s choice not to mandate an offset system bars the PCA from considering the effect of the Litchfield offset in determining whether to grant the permit at issue.
The majority contends that a “plain reading of the phrase ‘cause or contribute to the violation of water quality standards’ indicates that, so long as some level of discharge may be causally attributed to the impairment of Section 303(d) waters, a permit shall not be issued.” Because I feel this approach will effectively preclude issuance of a permit prior to completion of a TMDL, I believe it frustrates the purposes of the CWA and prevents the PCA