April 16, 2010Client Alert

Wastewater Discharge Permit Approvals Likely to Take Longer, Be More Contentious Following Recent Wisconsin Court Decision

The Wisconsin Department of Natural Resources (“DNR”) must entertain all challenges to newly issued wastewater discharge (“WPDES”) permits, according to a decision reached by the Wisconsin Court of Appeals earlier this week. The court rejected two separate arguments made by DNR, which were based on reasoning that the agency has used for years to limit the scope of reconsideration sought after final issuance of a WPDES permit. Now, opponents of a permitted project can challenge the validity of any final permit term or condition, even if no related objection or question was raised during the public review and comment period. Additionally, opponents will be able to challenge individual permit terms as being contrary to either Wisconsin’s wastewater regulations or federal regulations implementing the Clean Water Act. As a result, future WPDES permit applicants can expect longer DNR review periods, heightened public scrutiny and increased uncertainty following final permit issuance.

On April 13, 2010, the Court of Appeals released its decision in Andersen v. Dept. of Natural Resources, in which five citizens and two environmental groups – National Wildlife Federation and Clean Water Action Council of Northeastern Wisconsin, Inc. – challenged DNR’s handling of their petition for review of a WPDES wastewater discharge permit issued to Fort James Operating Company in Green Bay. At issue was DNR’s refusal to review the mercury sampling requirements included in the Fort James permit and its refusal to review permit terms that the challengers alleged violated federal law.

DNR’s review and approval of WPDES permit applications is a lengthy, involved process. Once DNR deems an application complete, it undertakes a complete analysis and prepares a draft permit. In accordance with state law and DNR regulations, the draft permit is released with a public notice that kicks off a 30 day public comment period, during which any citizen may request a public hearing on the draft permit. DNR reviews all submitted comments and considers whether any individual permit terms or conditions warrant revision. Finally, DNR issues the final WPDES permit, along with an explanation of any significant revisions made to the draft permit. Citizens then have 60 more days to petition DNR to review “the reasonableness of or necessity for any term or condition” of the final permit. Wis. Stat. § 283.63(1).

Relying on a 1986 Court of Appeals decision, DNR argued in Andersen that to preserve the right to challenge the final permit’s mercury sampling requirements, the challengers needed to raise that issue during the public review and comment period. DNR noted that since the draft permit’s mercury sampling requirements were not challenged during the public process, DNR had no reason to reconsider those requirements and address them, if necessary, prior to the issuance of the final permit. The Andersen Court rejected DNR’s argument, holding that it would penalize members of the public for their failure to participate earlier in the public review process and be inconsistent with the state’s goal of encouraging public involvement. Thus, under Andersen, a group of citizens could arguably sit on the sidelines during the entire public review process and then, nearly two months after a final WPDES permit is issued, petition DNR for review of any number of permit conditions that were seemingly not in dispute.

Furthermore, according to the Andersen Court, it is not enough that DNR review WPDES applications against DNR regulations and other state water pollution laws; DNR must also address every permit challenge that is based on specific elements of federal regulations, as well. DNR noted that Wisconsin’s entire state water pollution regulatory scheme has been reviewed and approved by EPA as being consistent with the federal Clean Water Act. Additionally, DNR is required to submit every WPDES permit application to EPA, and EPA may veto any proposed permit on the grounds that the permit terms are inconsistent with federal requirements. DNR argued that if any permit term is objectionable on grounds rooted in federal regulations, EPA will raise those objections. The Court of Appeals was unpersuaded and held that DNR must consider challenges alleging that individual state-issued permit conditions do not comply with federal regulations.

The practical result of the Andersen Court’s holding is that citizen petitioners who believe Wisconsin’s water pollution regulations do not sufficiently protect the public waters are now free to challenge DNR’s administration of those regulations through challenges to individual permit terms. The possibilities for such challenges are numerous, given that EPA guidance and implementation documents for the federal NPDES permitting program are thousands of pages long – leaving plenty of room for challengers to find DNR errors, inconsistencies or oversights. DNR will be unable to rely on its faithful adherence to the Wisconsin water pollution regulations that EPA has already determined properly implement the Clean Water Act, and, instead, will need to become equally versed in the nuances of both the state and federal regulatory schemes.

Based on our experience guiding numerous clients through the WPDES permitting process, we envision this new ruling will result in longer WPDES permit application review periods and more contentious challenges to individual permits, once issued. DNR has not yet decided whether it will seek Wisconsin Supreme Court review of the Andersen decision.

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