Two letters sent by the EPA to Iowa Senator Charles Grassley, which the Agency says were discussions of existing regulatory requirements for wastewater treatment plants, have been found to constitute unlawful rulemaking by a three-judge panel of the U.S. Court of Appeals for the 8th Circuit.  Accordingly, the court vacated the “rules” and remanded them to the Agency for further consideration.

Mixing zones and blending

The case involves EPA’s rules and policies on mixing zones and blending and their impact on treatment plants.  A mixing zone is a limited area or volume of water where initial dilution of a discharge takes place and where numeric water quality criteria can be exceeded.  Blending involves channeling a portion of peak wet weather flows around a treatment plant’s biological secondary treatment units and through nonbiological units, recombining that flow with its counterpart that traveled through the biological units, and then discharging the combined stream.  EPA’s rules consider secondary treatment other than biological treatment as a bypass, a prohibited action, unless there is no feasible alternative. 

The Iowa League of Cities had asked Senator Grassley to obtain clarification from the EPA on its approach to enforcing the mixing zone and blending rules.  The EPA subsequently sent the two letters to Grassley in June and September 2011.  The contested portions of the letters indicated that:

• All bacteria mixing zones in waters designated for primary contact recreation carry potential health risks and should not be permitted by state agencies authorized to implement and enforce Clean Water Act regulations. 
• The use of a secondary treatment alternative called ACTIFLO is an impermissible diversion from traditional biological secondary treatment.  ACTIFLO is a flocculation technique in which chemicals are used to aggregate solids and sands, causing them to settle.

State authority

The League first contended that the letters contradict the authority of states to approve bacteria mixing zones even in waters designated as primary contact recreation as long as site-specific criteria create scenarios in which there are no health risks and recreational areas are not endangered.  Second, the League argued that by prohibiting the use of ACTIFLO internally, as one element of a facility’s secondary treatment procedures, the EPA is effectively dictating treatment design, despite the Agency’s acknowledgment that the bypass rule and secondary treatment regulations do not allow for such determinations at the federal level.

Third factor

In considering the regulatory effect of the letters, particularly on EPA field inspectors reviewing compliance at wastewater treatment plants, the 8th Circuit cites an opinion in which the D.C. Circuit said that three factors should be looked at when determining if an agency action constitutes a regulation: the Agency’s own characterization of the action; whether the action was published in the Federal Register; and whether the action has binding effects on private parties or on the Agency.

The 8th Circuit focused on the third factor.  “Here, the letters can be considered ‘promulgations’ for the purposes of establishing our jurisdiction under [CWA] section 509(b)(1)(E) because they have a binding effect on regulated entities.”  The court again refers to an opinion by the D.C. Circuit (Appalachian Power Co. v. EPA) in which that court states:

“If an agency acts as if a document issued at headquarters is controlling in the field, if it treats the document in the same manner as it treats a legislative rule, if it bases enforcement actions on the policies or interpretations formulated in the document, if it leads private parties or State permitting authorities to believe that it will declare permits invalid unless they comply with the terms of the document, then the agency’s document is for all practical purposes ‘binding.’

“This reasoning persuades us that the June 2011 and September 2011 letters are binding as well,” said the 8th Circuit.

Administrative Procedures Act

The court specifically vacated both the mixing zone rule in the June 2011letter and the blending rule in the September 2011 letter as procedurally invalid under the rulemaking requirements of the Administrative Procedures Act. In addition, the court vacated the blending rule as in excess of statutory authority insofar as it would impose the effluent limitations of the secondary treatment regulations internally, rather than at the point of discharge into navigable waters.

Click here for the 8th Circuit’s opinion in Iowa League of Cities v. EPA.