Groups Challenge EPA's New Construction Stormwater Rules

EPA recently finalized its new stormwater rules that will impact nearly every construction and development project in the United States. The so-called Construction and Development Effluent Limitations Guidelines (C&D ELG) rule for the first time imposes an enforceable numeric limit on stormwater discharges from sites disturbing 10 acres or more at one time, requires monitoring to ensure compliance with the numeric limit, and requires nearly all construction sites to implement a range of prescriptive erosion and sediment controls and pollution prevention measures. Both the homebuilding industry and the U.S. Small Business Administration have taken legal action to challenge EPA's C&D ELG rule and, in particular, its numeric turbidity standard that dictates how murky stormwater can be when it runs off regulated construction sites.  The new C&D ELG requirements, published in the Federal Register on December 1, 2009, will directly apply to a construction site "operator" when they are incorporated into an individual or general NPDES (National Pollutant Discharge Elimination System) stormwater permit that applies to his/her project(s). Construction stormwater permits are good for five years.  States are required by EPA to incorporate the new ELG requirements into their permits upon next reissuance.  For detailed information on the ELG rule and a list of state permit expiration dates, click here for an AGC article.  History of the ELG Rule The new 2009 ELG rule is, in fact, the product of earlier litigation.  EPA released the 2009 ELG rule under a court order resulting from a lawsuit brought by environmental groups NRDC and Waterkeeper Alliance. Environmental plaintiffs sued EPA in 2004 challenging the agency's decision to withdraw a prior regulatory proposal to promulgate a C&D ELG after EPA found that the high cost of such an ELG would outweigh its benefits.  AGC and the National Association of Home Builders (NAHB) jointly intervened on EPA's side to defend its "no rule" decision.  A district court in California granted the plaintiffs' motion for partial summary judgment on the basis that EPA failed to comply with the Clean Water Act by not performing a non-discretionary duty to promulgate a C&D ELG (because the agency had listed construction in its CWA Section 304(m) clean-up plan). Both EPA and AGC filed an appeal with the U.S. Court of Appeals for the Ninth Circuit to contest the district court ruling that required EPA to issue an ELG for construction.  The Ninth Circuit affirmed the lower court's decision. ELG Litigation Round 2 Mounting a legal attack against the new 2009 ELG rule, NAHB and the Wisconsin Builders Association filed Petitions for Review at the end of December 2009.  The cases have been consolidated in the Court of Appeals for the Seventh Circuit. No briefing schedule has yet been set. The lawsuit challenges the new ELG rule on the basis that the numeric standard (280 NTU) cannot be met with "passive" stormwater treatment; therefore, construction site operators will be required to use "active" or "advanced" treatment systems.  EPA's economic modeling is based on the use of passive treatment.  If EPA had correctly analyzed that data, the numeric limit would be much higher.  Furthermore, EPA relied heavily on vendor data in developing the numeric limit. The Utility Water Act Group (UWAG) has joined the home building industry (NAHB and the Wisconsin Builders Association) in the C&D ELG litigation by filing its own petition on April 12, which was consolidated with the home building petitions in the 7th Circuit Court of Appeals. In addition, several NGO (non-governmental organizations) groups have filed a motion to intervene in the C&D ELG litigation (prior to UWAG's separate petition).  The home building petitioners have filed objections to that intervention on the grounds that EPA is best positioned to defend its own decisions and that the intervenors are not a necessary party to the litigation. The 7th Circuit has not yet ruled on these motions. In a separate proceeding, the Small Business Administration petitioned EPA April 20 under the Administrative Procedures Act to reconsider the C&D ELG and its numeric standard (280 NTU turbidity standard for certain larger construction sites). SBA has identified several significant issues relating to EPA's rulemaking process, data analyses, and regulatory approach that it believes warrant changes to the final C&D ELG rulemaking. It remains far too early to predict the outcome of these legal proceedings.  AGC has been and will continue to carefully monitor these developments, but the history of this rule reveals that the construction industry cannot count on the lawyers and the courts to get it right.  AGC will continue to urge its Chapters and members to prepare for the day when the rule remains likely to take effect and distribute compliance assistance tools. Knowledge On-Demand: How EPA's Stormwater Program Will Impact Contractors AGC recently held a webinar to help construction professions to begin to prepare for first-time nationwide discharge limits and monitoring requirements for construction site stormwater runoff.  During the webinar, titled EPA's Construction Stormwater Program: What the New Mandated Discharge Limits, Monitoring Requirements and Prescriptive E&S Controls Mean for Contractors, EPA experts - including one who helped write the rule and another who is updating the federal construction stormwater general permit (CGP) to incorporate the new requirements - explained the C&D ELG and the process by which EPA and state water permitting authorities are working to establish the details of how to sample stormwater from construction sites (through their respective NDPES general permits).  AGC's outside legal counsel discussed why the C&D ELG rule is likely to result in increased exposure of construction stormwater permittees to state and EPA enforcement actions. Penalties for violating these new federal C&D ELG requirements may reach $37,500 per day per violation. Are you prepared? To learn more about this digital download on-demand click here.  For additional information, contact Leah Pilconis at pilconisl@agc.org or (703)837-5332.