District Court Rejects Challenge to NPDES Exemption Brought under Citizen-Suit Provision of the CWA

Ecological Rights Foundation v. Pacific Gas and Electric

__ F. Supp.2d __ (N.D. Cal. 2013) 2013 WL 1124089

In Ecological Rights Foundation v. Pacific Gas and Electric, the United States District Court for the Northern District of California held that the citizen-suit provision of the Federal Clean Water Act (“CWA”) is not the proper vehicle for private parties to challenge the manner in which agencies choose to implement the CWA or its corresponding regulations.

In this case, the court rejected claims brought by the Ecological Rights Foundation (“ERF”), which sought to compel Pacific Gas and Electric (“PG&E”) to obtain National Pollutant Discharge Elimination System (“NPDES”) Permits for a number of its facilities in the Northern California region. The PG&E facilities at issue in this case were 31 service centers where PG&E stored vehicles, equipment, materials and supplies in connection with its electricity and natural gas services.

PG&E did not obtain NPDES permits for these service centers, contending that the CWA does not require NDPES permits for its auxiliary service yards. PG&E based its position on the Standard Industrial Classification (“SIC”) Code grouping under which the EPA has classified it. The EPA uses the SIC Code system to define the universe of regulated industrial activities under the NPDES program. Certain business enterprises, including those “engaged in the generation, transmission, and/or distribution of electricity,” are classified under a SIC Group Code that is regulated under the NPDES program.

Despite the EPA’s classification, ERF’s suit challenged PG&E’s failure to obtain NPDES stormwater permits for its 31 service centers. Specifically, ERF alleged that despite PG&E’s SIC Code Grouping, it should be required to obtain NPDES stormwater permits because it conducts “industrial” activities at its auxiliary facilities. ERF argued that PG&E should either be placed into a different SIC Code Group, or alternatively, that the PG&E facilities should be under a separate grouping from PG&E. ERF’s argument was based on the premise that the EPA and the State Water Board have the authority to, and indeed should, regulate these facilities under the NPDES program.

The court rejected ERF’s demand to reclassify PG&E’s SIC Code Grouping based on its individual service facilities. In the court’s view, while ERF’s interpretation of the CWA enforcement provisions was not entirely untenable, neither the EPA nor the State Water Board had ever interpreted the CWA in the way ERF suggested.

The court held that (1) the citizen-suit provision of the CWA is a vehicle for private parties to bring actions to enforce the CWA, it does not authorize a court to compel the regulators to implement the CWA differently; and, (2) because the regulatory agencies were not parties to the action, any challenge to the their implementation of the CWA without their participation in the suit was inappropriate. The court emphasized that Congress left it up to the EPA to make such determinations, and under the principles of “Chevron deference,” the courts were required to defer to the wisdom of those agency determinations. Accordingly, the court granted PG&E’s motion for partial summary judgment, holding that ERF failed to show it had a viable claim under the citizen-suit provision of the CWA.

This decision is noteworthy for two main reasons. First, as a practical matter, it preserves the status quo for businesses which are classified as “non-industrial” under the SIC Code Groupings, thus allowing them to continue to operate outside CWA stormwater regulations. Second, and perhaps more significantly, this decision reinforces that the courts will not allow citizen plaintiffs to predicate CWA enforcement actions on regulatory interpretations that the agencies have demonstrably declined to adopt. This emphasizes the rule that parties that seek to challenge a regulation (or an agency’s interpretation of a regulation) must do so through the appropriate channels, the CWA’s citizen-suit provision will not operate as a back-door for such a challenge.

We will continue to provide regular updates regarding the CWA and the NPDES program as they arise.

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