Lynn Kornfeld & Tommy Olsen, Faegre Baker Daniels LLP  |   May 14, 2012 resize text

LYNN KORNFELD Two lawsuits filed in March signal a new phase in the decades-long struggle between environmentalists and agriculture groups over nitrogen and phosphorous regulation under the Clean Water Act (CWA). In the suits, a coalition of environmental groups (Coalition) allege that the U.S. Environmental Protection Agency (EPA) violated the Administrative Procedure Act (APA) because it did not adequately respond to the Coalition’s petitions to use its CWA authority over water quality to address nitrogen and phosphorous pollution in the nation’s waterways. Nitrogen and phosphorous are key ingredients in fertilizer, and runoff from corn and soybean farms and pastures containing these nutrients has been identified as the primary cause of a polluted “dead zone” in the Mississippi River Basin and the Gulf of Mexico.

TOMMY OLSEN In a lawsuit filed in the Eastern District of Louisiana, the Coalition alleges that EPA’s denial of a petition for rulemaking to establish and enforce stricter water limits on nitrogen and phosphorous was “arbitrary and capricious” in violation of the APA (Gulf Restor’n Network v. Jackson, E.D. La., No. 2: 12-cv-00677, Mar. 13, 2012). The Coalition contends that its petition contained “voluminous evidence” that excessive nitrogen and phosphorous pollution has “devastating impacts on water quality and the ability of waters to support their designated uses, both in the states themselves and in downstream waters;” and that EPA, in denying the petition, failed to adequately explain why new standards were not necessary to meet the CWA’s water quality goals. Instead of using its rulemaking authority to impose a national numeric limitation, EPA maintained that building on existing technical support efforts and “[working] cooperatively with states and tribes to strengthen nutrient management programs” is “the most effective and sustainable way to address widespread and pervasive nutrient pollution.”

The Coalition filed another lawsuit against EPA in the Southern District of New York on the same day (Natural Res. Def. Council, Inc. v. Jackson, S.D.N.Y., No. 12-CIV-1848, Mar. 13, 2012). The complaint alleges that EPA violated the APA because it never responded to a November 2007 petition for rulemaking requesting that EPA update secondary treatment rules under the CWA, which would require publicly owned treatment works to implement new technologies capable of removing nutrients—including nitrogen and phosphorous—from wastewater before discharge. The Coalition seeks injunctive relief forcing EPA to respond to the rulemaking petition within 90 days.  

These lawsuits represent an effort by the Coalition to use EPA’s broad authority to regulate water quality under the CWA as a means of regulating agricultural operations, many of which are exempt from CWA’s pollutant discharge permitting scheme. Farmers throughout the Mississippi River watershed are increasingly concerned that a settlement agreement or Coalition victory could have a significant impact on their bottom line.

This is not the first time environmental groups have sought increased regulation of nutrients under the CWA. Following lawsuits brought in 1997 by the American Canoe Association, the American Littoral Association and others, EPA set an 11-year schedule for establishing a total maximum daily load (TMDL) for nutrients in the Chesapeake Bay. That standard, which was established in 2010, may offer some insight into the potential consequences of a “pollution diet” for the Gulf of Mexico.

The Chesapeake Bay TMDL—the largest ever developed by EPA—sets a maximum annual amount of nitrogen, phosphorous and sediment that can enter the bay from each river and jurisdiction, and also assigns pollutant loads specifically for the agricultural sector. States and municipalities in the Chesapeake watershed were required to develop watershed implementation plans (WIPs) with enforceable strategies to meet the TMDLs, subject to EPA penalties for noncompliance.

The projected impacts of this TMDL are significant. EPA itself estimates that 20 percent of cropped land in the Chesapeake watershed (about 600,000 acres) will have to be removed from production and converted to grassland or forest in order to achieve the required loading reductions. Moreover, farmers will be required to implement and build upon existing management practices—such as nutrient management planning, use of cover crops, continuous no-till farming and livestock stream exclusion—in order to achieve EPA’s cleanup goals, at a substantial operational and maintenance cost. In Virginia, to take just one example, the estimated cost for the agricultural sector to comply with the state’s WIP will be more than $1 billion. For farmers who operate with thin profit margins, this added expense could prove difficult to bear.

Beyond these costs, the Chesapeake Bay TMDL has also created substantial regulatory uncertainty for farmers in the watershed. The prospect of far-reaching federal regulation was recently signaled by Executive Order 13508, which President Obama issued in May 2009. The order calls for the federal government to lead a renewed effort to restore the Chesapeake Bay and its watershed. In response, EPA established an accountability framework in December 2009 for each of the six watershed states and the District of Columbia to meet the TMDL goals. EPA specifically stated that if the jurisdictions did not develop WIPs, identify two-year milestone commitments and/or fulfill those commitments consistent with its expectations, EPA would take “appropriate independent actions or consequences”—expanding NPDES permit coverage to currently unregulated sources; incorporating specific nutrient reduction management practices into NPDES permits; increasing oversight of state permit issuance; increasing federal enforcement and compliance; prohibiting new or expanded pollution discharges; discounting nutrient and sediment reduction progress; and conditioning or redirecting EPA grants, among the possible actions. This regulatory threat has had a chilling effect on agricultural investment and production in the watershed. Not surprisingly, the American Farm Bureau Federation and others have filed suit challenging the TMDL as exceeding EPA’s authority under the CWA.

The Chesapeake Bay TMDL has been described by EPA as “a model for watershed protection in other parts of the country,” so it would likely form the basis for a Mississippi River watershed TMDL that EPA might be forced to establish as a result of the two lawsuits filed in March. Given the stakes, agriculture groups in the Gulf region should be aware of this recent litigation. It may also be possible for agriculture groups to intervene in one or both of these cases. The Gulf Restoration Network litigation is particularly ripe for intervention because it involves the question of whether EPA acted reasonably in rejecting a nation-wide nitrogen and phosphorous standard in favor of a cooperative, state-by-state approach to the problem. Agriculture groups may want to add their perspective to the growing debate about how to best address nutrient runoff from agricultural operations.

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