The Eighth Circuit Court of Appeals has struck down two “interpretive” U.S. Environmental Protection Agency (EPA) letters relating to wastewater treatment under the Clean Water Act (CWA). Iowa League of Cities v. EPA, No. 11-3412 (8th Cir. 3/25/13). At issue are two guidance letters that EPA issued in 2011 at a senator’s request. The first, transmitted in June 2011, concerns “mixing zones,” and the second, transmitted in September 2011, concerns effluent blending.

Mixing zones essentially allow discharges to waters of the United States to result in constituent levels that exceed water quality standards if the standards will be met after the discharge has exited the mixing zone in the receiving water. Plaintiffs claimed that the June 2011 guidance letter effectively eliminated states’ ability to use mixing zones for bacteria. The court notes that EPA has recognized mixing zones since at least 1994. But, it says, EPA’s June 2011 letter states that all bacteria mixing zones in waters designated for “primary contact recreation” carry potential health risks and concludes that they “should not be permitted.”

Effluent blending typically is a concept applied to high flow conditions (that is, wet weather flows) when a municipal wastewater treatment plant’s usual treatment systems may be overwhelmed. At least in 2003, according to the court, EPA policy would allow wet weather flows to bypass secondary treatment and be recombined with the effluent from secondary treatment before the discharge point. As long as the actual discharge contained constituents that met the permit limits, EPA viewed such operations as acceptable. But beginning in 2005, EPA began to take the position that this type of “diversion” would be considered in violation of its rules that disallowed “bypassing” secondary treatment unless there were no feasible alternative. In its September 2011 letter, EPA confirmed its view that sending stormwater through a different treatment system, including one called ACTIFLO, and recombining before the discharge point would violate its rules.

Plaintiff sought review of both letters in the Eighth Circuit, asserting that they constituted new rules that had been issued without following required noticeand- comment procedures under the Administrative Procedure Act (APA). They also asserted that the new “rules” exceeded EPA’s authority under the CWA. EPA challenged the court’s jurisdiction, contending that the letters did not constitute final action and did not amount to new legislative rules.

Finding that both letters effectively promulgated new effluent limitations or other limitations under the CWA, the court noted that Iowa regulatory authorities had been informed that EPA would object to any permits inconsistent with the letters. The court said, “In effect, the EPA asks us to agree that when it couches an interdiction within a pro forma reference to state discretion, the prohibition is somehow transformed into something less than a prohibition. We decline to accept such Orwellian Newspeak.” The court also found the claims ripe for adjudication because “the disagreements before us are quite concrete,” as well as hardship to the parties under the circumstances, observing, “League members must either immediately alter their behavior or play an expensive game of Russian roulette with taxpayer money . . . .”

The court found that the June 2011 letter proclaims a new regulatory requirement that mixing zones “should not be permitted” for bacteria in streams designated for recreational use and vacated the rule because it was not issued following the APA’s requirements. Similarly it found that the September 2011 letter constituted a new rule, irreconcilable with EPA’s properly promulgated secondary treatment rule and bypass rule, and vacated that rule for the same reason.

The court then considered whether, even if properly promulgated, either of the rules could be upheld under the CWA. It found that the blending rule is not obviously precluded by any CWA provision and stated that EPA “may seek” to institute the rule “using the appropriate procedures.” But it found that the blending rule, in effect, applied effluent limits to different processes within a treatment system, while the CWA allows EPA to set limitations for the discharge point only. In other words, the court held that CWA effluent limits apply only at the end of the discharge pipe for municipal wastewater treatment systems. How the system meets the applicable permit limits is largely left to the treatment system operators under the CWA.