THOMAS GOULD, SHAREHOLDER OF AKERMAN SENTERFITT’S REAL ESTATE PRACTICE

What began in September 2006 as an isolated citizen's suit under 33 U.S.C. § 1365 of the Clean Water Act (the CWA), has been transformed by the Ninth Circuit Court of Appeals (Ninth Circuit) into arguably the most significant judicial holding¹ to directly (and negatively) impact private and public forest landowners, operators, managers and their collective economic activities. In the lawsuit, plaintiff argued that precipitation-based runoff from forest roads used for logging activities constituted an industrial (not silvicultural) activity, which should be considered a "point source" discharge under the CWA. As such, plaintiffs asserted the runoff would be subject to the CWA's section 402 National Pollution Discharge Elimination System (NPDES) permitting program and requirements.  

The Ninth Circuit agreed with plaintiff's argument. By doing so, the Ninth Circuit defied more than over 35 years of regulatory precedent involving the Silviculture Rule², ignored contrary judicial interpretations regarding the rule, and held that forest roads and their associated ditches and culverts constitute "point sources" under section 402 of CWA. No longer, according to the Ninth Circuit³, would traditional logging activities fall under the protection of the Silviculture Rule. Instead, these forest management activities would now be required to obtain an NPDES permit under section 402 of the CWA, in contradiction to the clear protections afforded by the Silviculture Rule. 

As discussed below, the Ninth Circuit's decision will likely affect the continued use of silviculture best management practices (BMPs), thus weakening overall water quality protection efforts, while, at the same time, killing jobs. Industry observers are hoping (as should those who support environmental protection and job creation) that the Ninth Circuit's decision is overturned by the U.S. Congress or the U. S. Supreme Court. We note that this article does not dissect the Ninth Circuit's misapplication of legal principles, which has been ably done in the two petitions for writs of certiorari seeking review of the Ninth Circuit's decision and in the amicus briefs⁴ filed in support thereof.

The CWA and EPA's Silviculture Rule 

The main objective of the CWA is to protect the waters of the nation from pollution.  This objective is carried out by the United States Environmental Protection Agency (EPA)–or delegated states–as part of the CWA's NPDES permitting program to address point source discharges. More specifically, section 402 of the CWA prohibits the discharge of a pollutant into waters of the United States from a "point source" without an NPDES permit.⁵ However, silvicultural activities have long been exempted from obtaining an NPDES permit because the associated runoff from these activities has been considered non-point in nature. 

By design, under the Silviculture Rule – promulgated by the EPA in 1976 – rainwater runoff from forest roads, ditches, and culverts and the construction and maintenance thereon is considered "nonpoint source" in nature.  In other words, it seems quite apparent that EPA never intended for runoff associated with these types of forest-management activities to be grouped together with the runoff from more traditional point sources (e.g., among many others, factories and landfills). To this point, the language in the Silviculture Rule is clear and unambiguous with regard to the point vs. nonpoint source issue, and states, in pertinent part that:

The term [silviculture point source] does not include 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.⁶

Additionally, as the regulatory agency charged with interpreting and enforcing the provisions governing the CWA's NPDES permit program and the Silviculture Rule, EPA's position hasn't changed in more than 35 years. EPA has, since the date it promulgated the Silviculture Rule, confirmed that stormwater runoff through culverts and ditches (associated with forest roads) "should [] be considered nonpoint in nature"⁷ and is "not meant to be subject" to the NPDES program.⁸ Along these same lines, EPA "has consistently maintained that, pursuant to this rule, 'ditches, pipes, and drains that serve only to channel, direct and convey nonpoint runoff from precipitation are not meant to be subject to the § 402 [point source] permit program.'"⁹  How could EPA have stated it any clearer in its rule – a rhetorical question to be sure. 

Unfortunately (and somewhat curiously), in reaching its decision, the Ninth Circuit (i) ignored more than 35 years of regulatory precedent established by the EPA, (ii) refused to recognize the longstanding tenets of judicial deference and statutorily imposed judicial review limitations, and (iii) rendered a decision that conflicted with prior judicial interpretations of the Silviculture Rule.  

What happens to BMPs?

The NAFO Brief, at page 8, asserts that "[f]orest roads of the type used for timber harvesting cover hundreds of thousands of miles, crossing 'waters of the United States' in countless locations.  They are built and maintained by private citizens and companies, counties and states, and the federal government."  In other words, as the NAFO Brief further instructs at page 3, the Ninth Circuit's decision "would require the private, state, county and federal actors that build and maintain roads for timber harvesting to obtain potentially hundreds of thousands (or millions) of section 402 [NPDES] permits."

In essence, this means that longstanding BMPs employed by private and governmental forest owners and operators to address the nonpoint nature of runoff from forest roads, culverts and ditches would be fundamentally altered¹⁰ and our nation's waters would become arguably less clean as a result.  

As set forth above, the main objective of the CWA is to protect the waters of the nation from pollution. Yet this protection does not occur predicated solely upon regulating the more discernible point source discharges under the NPDES program. Congress long ago recognized that nonpoint pollution creates a unique set of localized (state) issues that is "best regulated at a local level."¹¹ Illustrating this general point, forest management techniques by necessity vary from state-to-state as, for example, a BMP "that is appropriate for a coastal pine forest in Georgia may be wholly inadequate for a temperate rainforest in Oregon, or an Ozark mountain forest in Arkansas."¹²  Hence, section 319 of the CWA required states to "develop plans for any non-point source activities that are causing a state's water to fall short of the state's respective water quality goals."¹³ According to the 26-State Brief, "[f]orestry practices in the United States are now conducted under the most comprehensive program of [mandatory and non-mandatory] BMPs of any land use activity in the nation."¹⁴  

Nationwide, BMP programs have enjoyed significant compliance success. For instance, in Florida, a "long-term average of 94% compliance with silvicultural BMPs" has been achieved.¹⁵  Moreover, in a 2007 Florida Survey regarding silviculture BMP compliance, the survey found that the "statewide average for overall BMP compliance was 98.6%[.]"¹⁶

If the Ninth Circuit decision were to stand, then all of the State BMP programs and the professional training and scientific study that was (and continues to be) used to design, implement, and improve BMPs are in jeopardy of being replaced by a much less effective nationalized permitting scheme – a scheme that will likely fail to adequately capture the variance inherent to nonpoint runoff associated with localized conditions.  As the 26-State Brief argued:

…BMPs have become an accepted, well-understood, documented, approved and successful method of protecting water quality….Over the last three decades each amici state has expended thousands of hours and millions of dollars developing and implementing their respective BMP programs.  The states' BMP programs have been developed by certified silviculturalists, and these individuals meet certain standards of professional knowledge, skills and experience in multiple-use silviculture activities.  In order to meet EPA standards, amici states provide training and certification in soils and watershed management, and while individual BMP specialists are knowledgeable regarding the practices and procedures necessary to comply with sections 218 and 319 of the CWA, they are completely unfamiliar with the requirements of the CWA's NPDES program.¹⁷

Judicial Regulation – A Job Killer

Taken a step beyond the potential dismantling of BMPs and the related degradation to water quality that could feasibly occur, one does not need to stretch the mind far to contemplate another glaring impact that may afflict private and public forest landowners, managers, operators and local communities tied directly or indirectly to forest activities – job loss  

The Ninth Circuit has, by unauthorized¹⁸ judicial regulation, arguably killed jobs (or certainly dimmed the prospect of any job creation) by mandating the application of the section 402 NPDES permitting program to "hundreds of millions of privately and publicly owned acres of forest land … with millions of miles of forest roads having some form of water conveyance, or channeling, associated with them that are currently managed by amici states BMP programs."¹⁹  The job-killing chain reaction is not difficult to understand: regulation on a potentially unprecedented scale will raise operating costs, decrease profits, and impede (or thwart entirely) job creation in the forest-related industries.  

Alternatives to overturn the Ninth Circuit's decision are already in play, but their probabilities for success are anything but certain.

Two Potential Alternatives to Overturn the Ninth Circuit's Decision 

1.  Congress:  The cleanest fix is congressional action.  H.R 2541 and companion bill S. 1369²⁰ – referred to as the "Silvicultural Regulatory Consistency Act" – amend section 402(1) of the CWA by codifying the Silviculture Rule. The amendment provides the following:

(3) SILVICULTURAL ACTIVITIES.—

(A) NPDES PERMIT REQUIREMENTS FOR SILVICULTURAL ACTIVITIES.—The Administrator shall neither require a permit under this section, nor directly or indirectly require any State to require a permit under this section, for a discharge resulting from the conduct of any silvicultural activity, such as nursery operations, site preparation, reforestation and subsequent cultural treatment, thinning, prescribed burning, pest and fire control, harvesting operations, surface drainage, or road use, construction, and maintenance, from which there is runoff.

The legislation is bipartisan, coalescing in a multi-regional consensus, and does the following:

• Amends the CWA to specify that the activities listed in the Silviculture Rule do not require an NPDES permit.
• Clarifies that even if the silvicultural activity is considered a "discharge," no permit is required.
• Clarifies that use of a forest road does not require a permit.
• Clarifies (i.e., refers only to) the word "runoff" to address issues raised in the Ninth Circuit's decision regarding the words "natural" and "managed."

Despite bipartisan support and likely passage in the U.S. House, opposition by environmental groups could make passage in the U.S. Senate unlikely. However, pressure exerted in appropriations bills necessary to fund government agencies in FY 2012 appears to have forced a compromise between the two chambers. The conference report for the omnibus spending bill (H.R. 2055) was being circulated for signature in mid-December. The conference report memorializes an agreement that sets spending levels for the remainder of FY 2012 and contains an environmental policy rider that would bar EPA from requiring NPDES permits for stormwater runoff from roads, road building, or related maintenance associated with silvicultural or logging practices in forests. Of course, this comprise language (assuming it's approved) would expire on September 30, 2012, unless extended by Congress in the 2013 appropriation bill or through a continuing resolution.

Stay tuned to learn whether congressional action – that could in fact produce positive results for the economy – again disappears into the political-ether, vaporized by a political process that demonizes compromise and largely ignores common sense.

2. Supreme Court: A less certain and arguably much more remote²¹ fix would involve the Supreme Court overturning the Ninth Circuit's decision. Because the period for filing responses ended in November 2011, the Supreme Court is unlikely to make a decision on whether to accept review of the case until early 2012. If the Supreme Court were to hear and consider the case, an opinion may be issued by June 2012. However, the Supreme Court's recent order requesting the U.S. Solicitor General for the views of the Federal government could extend resolution of the case even further, until the October 2012 term. Stay tuned. 

Footnotes:

1. NW Envt'l Defense Center v. Brown, 640 F.3d 1063 (9th Cir. 2011).  While the decision is only binding in the Ninth Circuit, which includes California, Oregon, Washington, Hawaii, Nevada, Idaho, Montana, Alaska and Arizona, its invalidation of the Silviculture Rule will require EPA to promulgate new rules that would apply nationwide. 
2. Currently, 40 C.F.R. § 122.27.  As stated above, once the EPA adopts new rules to replace the Silviculture Rule, those new rules will apply to forest owners in all jurisdictions, not just those subject to the Ninth Circuit's decision.
3. It is worth noting that the Ninth Circuit has had 81% of its cases reversed that the Supreme Court has heard over the past 10 years. 
4. Two amicus briefs are referenced in this article, which have been filed on behalf of the following interests: (i) National Alliance of Forest Owners, American Farm Bureau Federation, and various other state and national trade associations all representing forest landowners ("NAFO Brief") and (ii) Arkansas, Alabama, Alaska, Florida, Georgia, Idaho, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Missouri, Montana, New Hampshire, New Mexico, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia, Washington, and Wyoming ("26-State Brief"). 
5. 33 U.S.C. §§ 1311(a), 1342.
6. 40 C.F.R. § 122.27 (emphasis added)
7. 41 Fed. Reg. at 24,711.
8. 41 Fed. Reg. at 6,282. 
9. 26-State Brief at p. 4 (citing 41 Fed. Reg. 6,282 (Feb. 12, 1976)
10. Presumably, effectual science-based BMPs will be replaced by a section 402 NPDES permitting regime that has never before been applied to silvicultural activities.  
11. 26-State Brief at p.1. citing section 319 of the CWA.
12. 26-State Brief at p. 13.
13. Id. at p. 12.
14. Id.
15. Florida Department of Agriculture and Consumer Services, Silviculture Best Management Practices (2011) at page 2
16. Florida Department of Agriculture and Consumer Services, Results of Florida's 2007 Silviculture BMP Implementation Survey (2007) at p.2.
17. 26-State Brief at p. 15.
18. Nowhere is the judiciary charged, empowered, or authorized to draft laws or regulations.  
19. Id. 
20. Both bills were introduced to their respective chambers on July 14, 2011.
21. The Supreme Court receives approximately 7,500 petitions for writ of certiorari each year and grants and hears oral argument in approximately 100 of those cases.