Summary of a Recent
Judicial Development in
Environmental Law

Active Federal NPDES Permits Did Not Lapse Simply because
EPA Transferred Permitting Authority to States

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In Natural Resources Council of Maine v. International Paper Co., 424 F. Supp. 2d 235 (D. Me. 2006), the United States District Court for the District of Maine granted International Paper Company's (IPC) motion for dismissal. The National Resources Council of Maine (NRCM) brought the instant action against IPC for allegedly discharging pollutants into the Androscoggin River without a permit. The court held that the NRCM's claims for injunctive relief were moot and that IPC's federal discharge permit remained effective until IPC was able to obtain a permit from the state.

Background

On June 21, 1985, IPC applied for a National Pollution Discharge Elimination System (NPDES) permit, but the United States Environmental Protection Agency (EPA) only issued company a one-year renewal permit, which was set to expire on September 30, 1986. Id. at 239. Before its one-year permit expired, IPC sought to renew. Id. The EPA did not address IPC's renewal application for almost six years, but on May 1, 1992, the EPA issued IPC a new 5-year permit. Id. IPC challenged various aspects of the new permit and requested an evidentiary hearing, but the EPA failed to respond for an additional 8-year period. Id. In the meantime, IPC continued to discharge pollutants into the Androscoggin River pursuant to its 1985 permit. Id.

After receiving no response from the EPA regarding its hearing request, IPC applied for renewal of the 1992 permit on August 1, 1997. Id. at 240. Finally, on July 14, 2000, the EPA responded to IPC's hearing request and 1997 request for renewal. Id. Its response stated that because the EPA neither granted nor denied IPC's request for a hearing in 1992, IPC remained "subject to the terms and conditions of its previously issued [1985] permit" during the meantime. Id. Additionally, the EPA stated that IPC's new permit would be issued "either by EPA New England or by the Maine Department of Environmental Protection [(MDEP)] (if the State receives approval of its pending request to assume implementation of the NPDES program)." Id. In January 2001, the EPA transferred responsibility for NPDES permitting from the EPA to the MDEP. Id. On May 26, 2005, the NRCM sent IPC a notice of its intent to sue pursuant to 33 U.S.C. § 1365(a)(1) for discharging pollutants at the Jay Mill into the Androscoggin River without an active NPDES permit. Id. at 241.

Arguments

The NRCM argued that "[d]ischarges from the Jay mill were last permitted in 1985, under a NPDES permit that expired in 1986"; therefore, the EPA "continued [the] permit past its expiration date, even though compliance with its terms promoted the continued degradation of the Androscoggin River." Id. It also argued that "on January 12, 2001, when the State of Maine assumed responsibility for NPDES permits governing discharges into Maine waters, even [IPC's] expired permit ceased to be operative. Since at least that date, all of the Jay mill's discharges of pollutants to the Androscoggin River [were] illegal." Id. at 241.

IPC argued that the NRCM lacked standing to sue, failed to give proper notice regarding some of its legal theories, and that its request for injunction was moot. Id. at 243-44. Additionally, IPC asserted that its 1985 permit remained in effect until the MDEP issued a new permit in 2005. Id. Based on its arguments regarding standing and mootness, IPC motioned the court to dismiss the suit because it lacked subject matter jurisdiction. Id.

Analysis and Holdings

The court first addressed IPC's argument that the NRCM lacked standing to bring the suit. Id. at 244. A citizen suit under the Clean Water Act (CWA) "must be grounded in an ongoing violation." Id. To determine whether a violation is ongoing, courts look to the date of filing. Id. In the instant case, the court held,

when NRCM filed suit, MDEP had not issued a new permit and . . . [IPC] was as of July 26, 2005, discharging pollutants into the Androscoggin River without a valid permit in violation of the CWA. Facially, NRCM's Complaint stated sufficient facts to establish an ongoing violation of the CWA and thus it met the standing requirement.
Id.

IPC also attacked NRCM's standing because it argued that the court could not redress NRCM's alleged injuries because IPC now had a permit. Id. Once again, the court restated that standing is determined when the case is filed, not while it is argued; therefore, IPC's argument failed. Id.

When ruling on a motion to dismiss for failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6), "a court must accept as true all the factual allegations in the complaint and construe all reasonable inferences in favor of the plaintiffs." Id. at 245. Under the usual circumstances, a court cannot consider any evidence outside of the complaint. Id. at 246. However, there is an exception "for documents the authenticity of which are not disputed by the parties; for official public records; for documents central to plaintiffs' claim; or for documents sufficiently referred to in the complaint." Id. (quoting Watterson v. Page, 987 F.2d 1, 3-4 (1st Cir. 1993)). Because the contents of the July 14, 2000, EPA letter and the Memorandum of Understanding transferring NPDES permitting authority to the state of Maine were sufficiently referred to in the petition, the court considered them in ruling on IPC's motion to dismiss. Id. at 248.

The court then addressed IPC's claim of insufficient notice. Id. at 249. For notice to be adequate, it must be specific enough to inform the accused party about what it was allegedly doing wrong and how to avert the lawsuit. Id. The CWA requires notice to be reasonably specific. Id. Apply this principle, the court held that the NRCM's notice to IPC was not reasonably specific because it did not "contain a fair warning that EPA had acted outside its statutory authority under 33 U.S.C. § 1342(b)(1)(B) by exceeding the five year limit." Id. at 251.

Next, the court examined IPC's argument that the NRCM's allegations were moot. Id. at 252. It contended that the court "should dismiss the Complaint on mootness grounds because a final MEPDES permit [had already] issued." Id. Mootness requires "that an actual controversy must [exist] at all stages of review, not merely at the time the complaint is filed." Id. Because the NRCM's petition requested a mandate stopping IPC from discharging pollutants into the Androscoggin River without an NPDES permit, "MDEP's issuance of a final, enforceable MEPDES permit to [IPC] on September 21, 2005, obviate[d] the need for an injunction requiring [IPC] to cease discharges until a permit ha[d] issued." Id. at 252, 255.

Finally, the court addressed what it called "the heart of the matter": "whether delegation of NPDES permitting authority from EPA to MDEP in January 2001 broke the chain of administrative extensions of [IPC's] 1985 NPDES permit." Id. at 257. The NRCM argued that "under 40 C.F.R. § 122.6(d)(1), EPA-issued permits may be continued in force after delegation only if permitted by state law, and because Maine law [did] not authorize MDEP to extend the terms of an EPA-issued permit, [IPC had] been operating without a NPDES permit since January 12, 2001-the date of delegation." Id. However, the EPA promulgated 40 C.F.R. § 122.6, which "expressly allows the conditions of an expired permit to continue in force 'until the effective date of the new permit' if the permittee has submitted a timely application for a new permit and the EPA 'through no fault of the permittee does not issue a new permit . . . on or before the expiration date of the previous permit.' " Id. For this reason, IPC's 1985 permit remained in effect until the MDEP issued it the new permit in 2005. Id. at 259. Ultimately, the court granted IPC's motion to dismiss.

The case was decided on March 28, 2006.