The U.S. Environmental Protection Agency (EPA) recently issued the 2017 Construction General Permit (CGP) for stormwater discharges under the National Pollutant Discharge Elimination System (NPDES) program, replacing the 2012 permit. Under this new permit, you may now be exposed to liability for someone else’s noncompliance if you are a builder or developer on a site with multiple operators.

The change

A footnote in Section 7.1 of the 2017 CGP now imposes joint and several liability for any violation of the permit on all operators of a single construction site. This means that the EPA can enforce an entire penalty against any one of the contractors or developers of a site without going after the others. Under the old permit, an operator was only responsible for compliance related to activities on his or her portion of a site. Now an operator can be found liable for violations caused by another contractor or developer, regardless of whether they are working under joint or separate stormwater pollution prevention plans (SWPPPs).

Under this new scheme, all operators on a site will be responsible for violations of the permit if they use a shared stormwater control for compliance, like a sediment basin, and someone fails to properly install, operate, or maintain the shared control. As a result, all builders and developers now must make sure that they don’t cause a violation or make any other operators’ controls or shared controls ineffective.

So what?

This new liability framework could be a problem for projects where there are multiple operators working on the same site as a result of a common plan of development. Operators would be allowed to perform different stormwater-related functions for the development site under an individual or group SWPPP. Under the 2017 CGP, however, dividing the functions would not relieve an individual operator from liability for a violation caused by someone else’s noncompliance.  A builder or developer would only be safe from enforcement if the discharges from his or her portion of the site were unaffected.

The controversy

Several industry groups opposed this change when the permit was in draft form, arguing that the new liability provision unfairly punishes responsible operators and forces them to babysit the compliance of other parties involved in a project. Builders and developers have serious concerns about the change because of the different responsibilities and legal relationships of the parties that typically work on a development project at different times.

The National Association of Home Builders (NAHB) claims that the provision could have particularly devastating effects on single-family home builders since small sites could be exposed to the risk of fines of over $50,000 per day for violations caused by other operators working in the same development.

As a result of its concerns about the 2017 CGP, the NAHB filed a petition to review the issuance of the permit in the U.S. Court of Appeals for the D.C. Circuit on February 6, 2017. The 2017 CGP went into effect on February 16, and it’s still unclear if the litigation will impact the terms of the permit.

Who is affected?

As of now, the 2017 CGP applies only to stormwater discharges from construction projects larger than 1 acre or smaller than 1 acre that are part of a larger development if they are located in Idaho, Massachusetts, New Hampshire, New Mexico, the District of Columbia, the U.S. territories except the U.S. Virgin Islands, most Indian country lands, and some areas subject to construction by federal operators. However, the federal permit acts as a model and the minimum requirement for all states. As a result, other states will likely update their permits to reflect the new 2017 CGP liability standard, giving this controversy nationwide impact.

What should you do?

While the NAHB litigation is pending, permittees still must comply with the terms of the new 2017 CGP. Developers and builders regulated by the federal permit that are involved in projects with other operators need to be aware of the new consequences of dividing permit functions and sharing stormwater controls. As for everyone else, stay tuned for similar liability changes in state stormwater permits to come.