WISCONSIN RESOURCES PROTECTION COUNCIL, ET AL., Plaintiff-Appellees, Cross-Appellants, v. FLAMBEAU MINING COMPANY, Defendant-Appellant, Cross-Appellee.
Nos. 12-2969 & 12-3434
United States Court of Appeals For the Seventh Circuit
Argued April 23, 2013 — Decided August 15, 2013
Before RIPPLE and HAMILTON, Circuit Judges, and STADTMUELLER, District Judge.*
Appeals from the United States District Court for the Western District of Wisconsin. No. 3:11-cv-00045-bbc — Barbara B. Crabb, Judge.
I
BACKGROUND
A. Relevant Statutory and Regulatory Framework
Congress enacted the CWA,
The Environmental Protection Agency (“EPA“) is the CWA‘s administrator. However, because the CWA also
It is undisputed that Wisconsin has obtained approval from the EPA to implement and administer its own NPDES permitting program, which it calls the Wisconsin Pollutant Discharge Elimination System (“WPDES“) program.2 The Wisconsin Department of Natural Resources (“WDNR“) administers the WPDES program and Wisconsin Administrative Code NR
After obtaining initial approval of a state NPDES program, a state with delegated authority can modify its program with EPA approval. When a state wishes to do so, the regulations direct it to “submit a modified program description” to the EPA for approval.
In 1987, Congress amended the CWA to include regulation of storm water discharge. See The Water Quality Act of 1987, Pub. L. No. 100-4, 101 Stat. 7 (1987) (codified at
(4) OTHER ENVIRONMENTAL PROGRAMS. If one of the following conditions is met, the department may determine that a facility is in compliance with permit coverage required under s. 283.33, Stats. [part of the WPDES program], and will not be required to hold a separate permit under s. 283.33, Stats.:
(a) The storm water discharge is in compliance with a department permit or approval, which includes storm water control requirements that are at least as stringent as those required under this subchapter.
Wisconsin submitted its proposed modifications, including NR § 216.21(4)(a), to the EPA for approval in 1994. The EPA apparently did not deem these modifications substantial and so did not follow the approval process outlined in
B. Flambeau‘s Operations
From 1993 until 1997, Flambeau operated an active mine in Ladysmith, Wisconsin, along the Flambeau River. During this time, WDNR regulated Flambeau under a separate WPDES permit and a mining permit, which also imposed restrictions on Flambeau‘s storm water discharge. Flambeau had a reclamation plan in place to restore the mine site after the cessation of active mining. However, the City of Ladysmith and the Ladysmith Community Industrial Development Corporation asked Flambeau to preserve the mine site‘s current buildings, which was not called for under the original reclamation plan. Flambeau agreed and sought modification from the WDNR of its reclamation plan and mining permit. After public notice and comment, the WDNR approved Flambeau‘s new reclamation plan and modified its mining permit.
In conjunction with its review of Flambeau‘s proposed modifications, the WDNR evaluated potential storm water discharge from the mine site. Eventually, the WDNR decided to terminate Flambeau‘s separate WPDES permit and instead, pursuant to its authority under NR § 216.21(4)(a), regulate Flambeau‘s storm water discharge under its mining permit. This approach permitted the WDNR to conduct more frequent inspections of the mine site than would a separate WPDES
The current water handling procedures are acceptable to the department and are consistent with the Mining Permit, including the Surface Water Management Plan, and the Wisconsin Pollutant Discharge Elimination System (WPDES) Permit. It is our intent that the WPDES permit will continue to regulate discharges from the site through outfalls 001 and 002 as long as water is being pumped from one location to another on the site. Any discharge through those outfalls must comply with the effluent limits and monitoring requirements specified in the WPDES permit[] … as long as the WPDES permit remains in force. Once all permanent water management structures and facilities are in place and pumping is no longer necessary, discharges through outfall 002 will cease to be covered under the WPDES permit. At that time, stormwater man-
agement will fall under the regulatory authority of the Mining Permit and its associated plans.9
The WDNR reiterated its decision to regulate Flambeau‘s storm water discharge under the mining permit rather than a separate WPDES permit again on September 8, 1998. The WDNR wrote to Flambeau “to acknowledge that surface water management and related discharges … . at the Flambeau mining site are no longer subject to the provisions of the Wisconsin Pollutant Discharge Elimination System (WPDES) Permit. This is consistent with the regulatory approach outlined in [the WDNR‘s] letter to [Flambeau] dated March 29, 1998.”10 On September 23, 1998, the WDNR terminated Flambeau‘s WPDES permit.11 All of Flambeau‘s subsequent storm water discharges complied with the mining permit.
C. District Court Proceedings
Plaintiffs brought this action in the district court under the citizen-suit provision of the CWA,
A bench trial was held, after which the district court found that Flambeau had violated the CWA because copper was discharged eleven times from the mine site and reached navigable waters of the United States without a permit. The court emphasized that “[t]he amounts were so modest that I would declare them de minimis”13 and that Flambeau‘s “efforts to protect the environment during its mining operations and reclamation effort” were “exemplary” and “deserve commendation, not penalties.”14 However, because the CWA is a strict liability statute, see Kelly v. United States EPA, 203 F.3d 519, 522 (7th Cir. 2000), the district court found Flambeau liable and
II
DISCUSSION
Flambeau raises a variety of issues on appeal. It asserts that the district court erred at summary judgment when it determined that the CWA‘s permit shield did not apply and that Wisconsin is not a necessary party whose joinder is required. Flambeau next submits that the district court‘s determination that Flambeau violated the CWA eleven times is erroneous because the court failed to perform the correct analysis and erroneously determined certain waterways to be within the CWA‘s jurisdiction. We begin with the permit shield.
A.
The CWA makes “unlawful” “the discharge of any pollutant by any person” “[e]xcept as in compliance with” certain
Plaintiffs contend that Flambeau is not entitled to the permit shield because Flambeau does not hold a WPDES permit and its mining permit was not issued pursuant to the CWA. Plaintiffs allege that Wisconsin‘s NR § 216.21(4)(a), although codified in Wisconsin‘s Administrative Code as part of the state‘s WPDES program, is not part of Wisconsin‘s approved NPDES program because the EPA never approved
B.
Whether the CWA‘s permit shield applies to Flambeau is a question of law, which we review de novo. See Elusta v. City of Chicago, 696 F.3d 690, 693 (7th Cir. 2012). We begin by noting that there is evidence that the EPA approved NR
Informed by basic principles of due process, it is “a cardinal rule of administrative law” that a regulated party must be given “fair warning” of what conduct is prohibited or required
The United States Court of Appeals for the District of Columbia Circuit has explained:
In the absence of notice—for example, where the regulation is not sufficiently clear to warn a party about what is expected of it—an agency may not deprive a party of property by imposing civil or criminal liability. Of course, it is in the context of criminal liability that this “no punishment without notice” rule is most commonly applied. But as long ago as 1968, we recognized this “fair notice” requirement in the civil administrative context. In Radio Athens, Inc. v. FCC, we held that when sanctions are drastic—in that case, the FCC dismissed the petitioner‘s application for a radio station license—“elementary fairness compels clarity” in the
statements and regulations setting forth the actions with which the agency expects the public to comply. 401 F.2d 398, 404 (D.C. Cir. 1968). This requirement has now been thoroughly “incorporated into administrative law.” Satellite Broadcasting Co. v. FCC, 824 F.2d 1, 3 (D.C. Cir. 1987); see also Rollins, 937 F.2d at 654 n.1, 655 (Edwards, J., dissenting in part and concurring in part) (principle is not constitutional, but “basic hornbook law in the administrative context,” and “simple principle of administrative law“).
Gen. Elec. Co. v. United States EPA, 53 F.3d 1324, 1328-29 (D.C. Cir. 1995) (citations omitted) .
In determining whether a party received fair notice, courts frequently look to the regulations and other agency guidance. “If, by reviewing the regulations and other public statements issued by the agency, a regulated party acting in good faith would be able to identify, with ascertainable certainty, the standards with which the agency expects parties to conform, then the agency has fairly notified a petitioner … .” Howmet Corp. v. EPA, 614 F.3d 544, 553-54 (D.C. Cir. 2010) (internal quotation marks omitted). In United States v. Cinergy Corp., we held that the defendant did not have fair notice of an EPA prohibition under the Clean Air Act where it “complie[d] with a State Implementation Plan that the EPA ha[d] approved,” even though the defendant knew that the EPA intended for the state to amend its plan. 623 F.3d at 458. Agency guidance provided privately to a regulated entity other than the defendant also is insufficient because it does not permit the defendant to determine “with ascertainable certainty” what is
Here, Flambeau did not have notice that its permit might not be a valid WPDES permit or that it needed a permit other than the one the WDNR determined was required. First, it is undisputed that Wisconsin, through the WDNR, is the proper, and only, CWA administrator with authority to issue NPDES/WPDES permits for Flambeau‘s mine site. As Flambeau transitioned from active mining to reclamation, the WDNR determined that Flambeau did not require a separate, specifically termed “WPDES” permit apart from its mining permit and sua sponte terminated the separate permit. Thus, the only available guidance from the only CWA permit-issuer was that the mining permit was a WPDES permit. This is the same position the WDNR still maintains—that Flambeau‘s mining permit is a WPDES permit. We do not require a regulated party to establish that the regulating agency had actual authority to issue a facially proper, and therefore presumptively valid, regulation before complying with the agency‘s command.
In this case, however, even if Flambeau consulted Wisconsin‘s Administrative Code, in which the WPDES program is codified, a reasonable, diligent search would have found statutory authorization under the WPDES program for the WDNR to regulate Flambeau in the manner it did and for the
We recently affirmed the principle that a private party is entitled to rely on published regulations. In Cinergy, we held that the defendant could not be charged with violating the Clean Air Act when it complied with the published version of a regulation that was part of Indiana‘s administration of the Clean Air Act. The EPA had secured Indiana‘s agreement to amend the regulation but Indiana had yet to do so. The EPA sought to impose a penalty on the defendant for violating the future amended version of the regulation. The EPA submitted that there was no due process problem because the defendant “was ‘on notice’ that [the regulation] did not mean what it said.” Cinergy Corp., 623 F.3d at 458. We rejected this argument, holding that the defendant was only on notice of what “a straightforward reading of [the regulation] permitted.” Id.
Plaintiffs contend that Flambeau was on notice that it lacked a valid WPDES permit. According to plaintiffs, Flambeau had notice because it possessed a separate WPDES permit in the past and language on its mining permit requires the permitee to obtain other permits as required by law.23 These contentions are unpersuasive. First, Flambeau knew that it needed a WPDES permit but was informed by the WDNR that its mining permit would serve as a WPDES permit, consistent with NR § 216.21(4)(a), and the WDNR sua sponte terminated Flambeau‘s separate WPDES permit. Plaintiffs maintained at oral argument that Flambeau‘s proper course of action was to apply for a WPDES permit. However, the WDNR made clear, by its termination of the separate permit and by its consistent position that a separate WPDES permit was unnecessary, that
Second, the mining permit language directing the permit holder to obtain all other permits required by law does not answer the question. For NR § 216.21(4)(a) provides that the WDNR can determine that a separate WPDES permit is unnecessary. Moreover, neither of these facts—Flambeau‘s prior possession of a separate WPDES permit or the language of its mining permit—put Flambeau on notice of the risk that NR § 216.21(4)(a) was not actually approved by the EPA and so was beyond the WDNR‘s CWA authority. Rather, plaintiffs have established only that Flambeau knew that it no longer held a separate WPDES permit.
At bottom, plaintiffs are attempting to attack collaterally the validity of Wisconsin‘s WPDES program by requiring Flambeau to prove that the specific provision of the program under which the WDNR granted its putative WPDES permit, NR § 216.21(4)(a), is valid. There are two problems with this approach.
First, forcing a permit holder to establish that the undisputed permitting entity had actual authority to issue the permit, despite a facially valid law authorizing the entity to issue the permit, would vitiate the permit shield. Permit holders would be brought into court to establish not only the validity of their permits, but also the validity of the issuing
Second, plaintiffs’ approach constitutes a collateral attack on Wisconsin‘s WPDES program, specifically NR § 216.21(4)(a). Plaintiffs claim to challenge only Flambeau‘s conduct; however, integral to this challenge is plaintiffs’ assertion that Flambeau lacks a WPDES permit and that NR § 216.21(4)(a) is not, contrary to Wisconsin‘s view and the section‘s plain language, part of the WPDES program. Plaintiffs fault Flambeau for doing what its CWA administrator and Wisconsin law authorize it to do. This is impermissible. See Kelley v. Bd. of Trs., Univ. of Illinois, 35 F.3d 265, 272 (7th Cir. 1994) (holding that “insofar as the University actions were taken in an attempt to comply with the requirements of Title IX, plaintiffs’ attack on those actions is merely a collateral attack on the statute and regulations and is therefore impermissible“); Milwaukee Cnty. Pavers Ass‘n v. Fiedler, 922 F.2d 419, 424 (7th Cir. 1991) (“Insofar as the state is merely doing what the statute and regulations envisage and permit, the attack on the state is an impermissible collateral attack on the statute and regulations. We add that the federal regulations explicitly permit the state or other entity [to engage in the conduct plaintiffs challenged].“).
In sum, Flambeau was told by the WDNR that its mining permit constituted a valid WPDES permit. The WDNR‘s authority to regulate Flambeau under its CWA authority was
C.
Furthermore, we deny plaintiffs’ cross-appeal. In order to be entitled to attorneys’ fees under the CWA, plaintiffs must be “a[] prevailing or substantially prevailing party.”
Conclusion
Accordingly, we must reverse the judgment of the district court.
REVERSED