The Clean Water Act prohibits the discharge of pollutants to waters of the United States from any point source without a permit, and the CWA established the National Pollutant Discharge Elimination System (NPDES) to regulate such discharges. Originally the CWA did not regulate stormwater runoff, however, in 1987 Congress amended the CWA to establish a phased approach for regulating stormwater runoff under the NPDES system.

As detailed by the 9th Circuit in Decker, the EPA’s Silvicultural Rule (40 CFR 122.27(b)(1)), which was originally promulgated in 1973, has a long history and was the subject of prior lawsuits shortly after it was promulgated (and again after it was revised). The Rule regulates “any discernible, confined and discrete conveyance related to rock crushing, gravel washing, log sorting, or log storage facilities which are operated in connection with silvicultural activities and from which pollutants are discharged into waters of the United States.” However, it exempts “non-point source silvicultural activities such as nursery operations, site preparation, reforestation and subsequent cultural treatment, thinning, prescribed burning, pest and fire control, harvesting operations, surface drainage, or road construction and maintenance from which there is natural runoff.”

The 9th Circuit found that the CWA was intended to be comprehensive in controlling pollution and the Court took issue with the EPA’s attempt to exempt an entire category of point sources on the basis of the origin of the water (natural ran versus man made). Essentially the Court determined that this differentiation was not justifiable and could not be given the deference that is normally afforded to governmental agencies. Thus, the 9th Circuit held that the Silvicultural Rule did not exempt stormwater runoff from logging roads that is “collected and channeled into a system of ditches, culverts and conduits before being discharged” to rivers and streams.

Further, the Court held that Congress did not approve of the Silvicultural Rule by enacting the 1987 CWA amendments. The 9th Circuit pointed out that Congress’1987 amendments addressed five categories of industrial discharges in Phase I and one of those categories included logging operations. Thus, in the 9th Circuit’s view, even though the EPA’s Phase I industrial stormwater regulations exempted those activities covered by the Silvicultural Rule, the Court ruled that a NPDES permit was required under the EPA’s industrial stormwater regulations for logging road runoff because logging operations were encompassed within one of the CWA’s “industrial activities.”

The Supreme Court agreed to review the 9th Circuit’s decision on June 25, 2012, however, a hearing date has not been announced. In the meantime, the Court will have to sort through the numerous amici briefs that have already been filed on behalf of the Petitioner and those that will undoubtedly be filed in support of the 9th Circuit decision and the Northwest Environmental Defense Center.

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The Tarrant case is a dispute between Texas (Tarrant, Texas Regional Water District) and Oklahoma over water located in the Red River. The Texas Water District believes it has a right to access water in the Red River in Oklahoma pursuant to an agreement signed by Texas, Oklahoma, Arkansas and Louisiana (the “Red River Compact”). Siding with Oklahoma, the lower agreed that Texas is only guaranteed a certain minimum downstream flow under the Compact. In this context, the case appears to have very little to do with the compacts governing water use within the Great Lakes basin.

However, it’s the Water District’s constitutional argument that the Great Lakes States and Canada should pay attention to. The Water District claims that the “protectionist” character of the Red River Compact violates the dormant Commerce Clause of the U.S. Constitution. The Commerce Clause of Article 1 of the U.S Constitution gives Congress the exclusive authority to regulate interstate commerce. The dormant Commerce Clause is the legal theory that because Congress regulates interstate commerce, States cannot enact legislation that unreasonably restricts interstate commerce and prevents States from being “protectionist” with their natural resources.

According to the Water District, the Supreme Court has consistently required that Congress unambiguously acknowledge and approve a statute’s or a Compact’s unreasonable restrictions on interstate commerce and cited Sporhase v. Nebraska, 458 U.S. 941 (1982) and South-Central Timber v. Wunnicke, 467 U.S. 82 (1984) in support of its position. In the Water District’s view, Congress has to explicitly approve the restrictive nature of the Compact and Congress’ intent cannot be gleaned by looking at the restrictive language in the Red River Compact as a whole.

The two main compacts affecting the Great Lakes are the Great Lakes Charter and the Great Lakes St. Lawrence River Basin Water Resources Compact. A detailed description of the scope of each is beyond the intent of this article, but the following provides a brief summary of each:

• Great Lakes Charter / Annex 2001. Established a cooperative arrangement between the Great Lakes States and Ontario and Quebec whereby each party agreed to provide notice to each other and to consult on any proposed diversions of water from the Great Lakes Basin.
• Great Lakes – St. Lawrence River Basin Sustainable Water Resources Agreement / Great Lakes St. Lawrence River Basin Water Resources Compact. Established the structure that the Great Lakes States and Provinces use to manage water withdrawals from the Great Lakes Basin. In particular, the agreements call for an outright ban on new diversions of water from the Basin and grant only limited withdrawals for use by communities within the Basin. The agreements are managed by two governing bodies: the Great Lakes – St. Lawrence Water Resource Regional Body and the Great Lakes – St. Lawrence River Basin Water Resources Council. Congress consented to and approved the Water Resources Compact in 2008 by enacting Public Law 110-342.

Depending on how the Supreme Court rules in the Tarrant case, if the Red River Compact falls, it could put the Great Lakes Compacts on shaky ground. Although Congress approved the Compact in Public Law 110-342 in 2008, it did not make any statement that it was explicitly authorizing the Compacts’ unreasonable restraint on interstate commerce. Although such an intent could be inferred from Congress’ approval of a Compact that clearly calls for a ban on out-of-Basin diversions, this is the type of argument that the Tarrant case has called into question. Therefore, if the Supreme Court adopts the position of the Texas Water District in the Tarrant case, the Great Lakes Water Resources Compact could be subject to a challenge by a non-Great Lakes State that was interested in establishing a pipeline from the Great Lakes to an arid out-of-Basin area.

Such an outcome could be like manna from heaven for southern arid States as they might argue like the Water District in the Tarrant case:

” [The strain on western water supplies] makes appropriations by arid western states from water rich neighboring states essential, but by encouraging the ‘tendencies toward economic balkanization’ that the Commerce Clause was intended to prevent, the decision below may make such appropriations effectively impossible. Localities blessed with substantial water reserves now are free, under the Tenth Circuit’s rule, to hoard water while their immediate neighbors go dry.” Pet. at 26.

Clearly, with water supplies becoming more scarce in arid States, they have an increased interest in tapping into States with abundant water resources. We will track this case and provide more information when it becomes available.

The post A Supreme Court Case to Keep an Eye on: Tarrant Regional Water District V Herrmann appeared first on Dawda PLC.

At issue was an ongoing dispute over the discharge of channeled stormwater runoff from logging roads in Oregon’s Tillamook State Forest. This stormwater is generated when rain runs off of logging roads and travels from ditches onto rivers and streams depositing sediments. The Northwest Environmental Defense Center (NEDC) sued logging and paper companies that were lawfully logging in the State Forest; alleging that they had violated the Clean Water Act. Specifically, the NEDC alleged that the stormwater run-off from an active logging road constituted an unpermitted discharge of a pollutant from a point source, that posed a risk to endangered species and aquatic life.

In 2007 the District Court in Northwest Environmental Defense Center v Brown, 476 F.Supp.2d 1188 (D. Or., 2007) held that NPDES permits were not required because the channels that received the stormwater were not point sources under the Clean Water Act and that the “Silvicultural Rule” did not require a permit pursuant to 40 CFR §122.27(b)(1). In 2011 the U.S. Court of Appeals (Ninth Circuit) reversed this ruling and held that, in fact, these logging roads were point sources and were not exempt from permitting requirements under the applicable industrial stormwater rules. [See Northwest Environmental Defense Center v Brown, 640 F.3d 1063 (9th Cir. 2011.]

The U.S. Supreme Court accepted the EPA’s position that the logging roads did not constitute an industrial activity and the roads were only related to the harvesting of raw material for which a NPDES Permit was not required. The Court in giving deference to EPA’s opinion, agreed that the water conveyance at issue did not directly relate to the “manufacturing, processing, of raw materials, storage areas at an industrial plant” (40 CFR §122.26(b)(14). For that reason, the Supreme Court reversed the Ninth Circuit decision and held the activity did not come within the scope of the industrial stormwater rule.

Justice Scalia issued a separate opinion dissenting in part, with the majority opinion, on the issue of giving deference to the EPA’s interpretation of a regulation, when it is at odds with the natural reading of the regulation.

The American Forest and Paper Association has come out in support of the decision and repeated its position that runoff from logging roads has been successfully regulated through best management practices employed by the industry for over 35 years.

It is interesting to note that in advance of oral arguments before the Supreme Court, the EPA clarified in the “Silvicultural Rule” and stated that NPDES permit requirement do apply to logging operations that involve rock crushings, gravel washing, log sawing and log storage. These are all activities enumerated in the Silvicultural Rule. In response, the NEDC has filed a petition to review this rulemaking by EPA.

The post Recent Supreme Court Cases – Logging Roads and the EPA’s Silvicultural Rule appeared first on Dawda PLC.

On January 15, 2019, the Supreme Court ruled unanimously in the case of New Prime Inc. v. Oliveira that independent contractors working in interstate commerce (e.g., the transportation industry) may not be forced into mandatory arbitration. They stated, “a court’s authority to compel arbitration … does not extend to all private contracts, no matter how emphatically they may express a preference for arbitration.”

The New Prime case involved a dispute between a trucking company and one of its drivers, Dominic Oliveira, who was classified as an independent contractor under an operating agreement that contained a mandatory arbitration provision. The agreement instructed that even disputes over the scope of the arbitrator’s authority must be resolved by an arbitrator. When Oliveira filed a class action against New Prime, alleging that the company misclassifies its drivers as independent contractors to deny them lawful wages, New Prime asked the court to compel arbitration under the Federal Arbitration Act (the “Act”).

The Act creates an exception to the enforcement of contractual arbitration provisions, and does not authorize court-ordered arbitration for disputes involving “contracts of employment of … workers engaged in foreign or interstate commerce.” The question presented in the New Prime case was whether this exception extended to truckers hired as independent contractors rather than as direct employees.  The Court determined that independent contractors working as truckers, in addition to seamen and railroad employees, were deemed to qualify under this exception of the Act, and therefore could not be compelled into arbitration.​

Much of the Court’s analysis rested on the Act’s use of the term “contract of employment.” Today, a “contract of employment” is widely viewed solely as a contract between an employer and an employee, one of which is easily distinguishable from an agreement a company may have with an independent contractor. However, the Court concluded that, when the Act was adopted in 1925, such distinctions were not as formalized as they are today. The drafters of the Act intended that “employment” refer to all “work” in general, including the work of independent contractors.

Proponents of the Court’s decision see it as a victory for workers in the transportation industry, who are likely to see an increase in wages, whereas those more skeptical of the holding believe it will result in increased costs for companies to transport goods and thus an increase in the cost of goods for consumers and retailers.

The case comes as the first in a trio of arbitration suits set for argument this term. Keep an eye out for the Court’s decisions in Lamps Plus, Inc. v. Varela, in which the Court will determine whether state courts can order class arbitration even when there is no contractual basis to do so, and Henry Schein v. Archer & White Sales, Inc., concerning whether a court or an arbitrator should be charged with making threshold determinations about the arbitrability of claims.

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