Regulating Water Diversion Activities - What Is the Point?

Mark T. Pifher
Trout, Witwer & Freeman, P.C.

As anyone familiar with Endangered Species Act (ESA) issues in the West is fully aware, the adequacy or inadequacy of water flows for riparian species is often a central issue in the regulatory debate. Last summer's all too public battle over water deliveries in the Klamath River Basin is but one example. Recently, various circuit courts have rendered significant decisions in Clean Water Act (CWA) actions which may serve to intensify the struggle between water management for traditional consumptive beneficial uses, and retention "in stream" for the benefit of aquatic species. Each of these cases focused upon the question of whether the activity in dispute constituted a point source discharge of pollutants for which a National Pollution Discharge Elimination System (NPDES) permit would be required pursuant to Section 402 of the CWA.

In Headwaters, Inc. v. Talent Irrigation District, 243 F.3d 526 (9th Cir. 2001), the issue was whether the application of herbicides to irrigation canals constituted such a regulated discharge. The court initially noted that to establish a violation of the CWA permit requirement, one must show that defendants "(1) discharged (2) a pollutant (3) to navigable water (4) from a point source." Id. at 532. Applying this multi-step test, the Ninth Circuit found that application of the herbicide to the canal qualified as a "discharge" because "the canals themselves are waters of the United States." In any event, the chemical in question had leaked into a nearby creek, a tributary of waters of the United States, and the action was therefore subject to CWA jurisdiction. Furthermore, the chemical residue remaining after the application was a "pollutant" despite its originally intended beneficial use. Finally, no one disputed that the hose employed to apply the herbicide qualified as a "point source." Hence, the court concluded that the requisite elements of a regulated discharge were present. The fact that the chemical had been approved for such use under the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136, did not modify this conclusion, as the statutes "have different, although complementary purposes," with one establishing a uniform labeling system to regulate use for purposes of protecting human health and the environment, and the other serving to control discharges on a site-specific basis. Headwaters, 243 F.3d at 531.

If this opinion, which is currently undergoing review by EPA and should shortly be the subject of an additional agency policy statement, is applied nationwide in the future, it could force those who regularly use such water conveyance structures to modify their practices in a manner which may be contrary to the best interests of threatened and endangered species. For example, if it is overly burdensome to obtain and ensure compliance with discharge permit requirements, traditional mechanized ditch clearing could replace chemical applications, resulting in sediment releases or other disturbances with adverse consequences on any downstream fishery. In the alternative, depending upon state water rights constraints, owners and operators of the structures may modify their water delivery systems, e.g., utilize closed pipes or simply minimize canal flows. This may, in turn, adversely alter flow patterns and amounts as needed by the species. In any event, incentives to create riparian habitat, including wetlands, may be dealt a significant blow, as the decision applies equally to insect control activities, such as mosquito control.

Catskill Mountains Chapter of Trout Unlimited v. City of New York, 273 F.3d 481 (2nd Cir. 2001) involved a "transbasin" diversion of water through a tunnel by New York City in order to meet municipal drinking water needs. Suspended solids, turbidity and heat levels in the basin of origin differed from those found in the basin of receipt. Refusing to afford Chevron-style deference to EPA's policy statements on "dam discharges" as reflected in National Wildlife Federation v. Gorsuch, 693 F.2d 156, (D.C. Cir. 1982), the court undertook an independent analysis and found the tunnel discharge to be the addition of a pollutant from a point source for which a permit would be required. The Second Circuit was of the opinion that by transferring water from a different watershed, any argument regarding the "sameness" of the source was lost and there was an "addition" of pollutants/sediments from a point source/tunnel. Catskill Mountains, 273 F.3d at 492. Compare Colorado Wild, Inc. v. U.S. Forest Service, 122 F. Supp. 2nd 1190, (D. Colo. 2000) (the mere withdrawal of water is not a discharge of pollutant under the CWA).

Should the reach of this decision extend to other circuits, especially in the West where transbasin diversions are a vital part of water delivery systems, it may trigger many of the same consequences as its Ninth Circuit predecessor. For example, the "means" of diversion and delivery could be altered so as to avoid any discharge into natural water bodies; the timing of releases, based on pollutant loadings, could be modified; and entities could begin to reuse transbasin waters to extinction, thereby further reducing the amount "imported" but eliminating or at least severely impacting "downstream" ecosystems dependent upon return flows and wastewater discharges. Further, and perhaps of greater immediate concern, the associated permit consultation process may lead to confrontation over terms and conditions tied to "flow amounts," with the federal agencies seeking either changes in flow patterns to the basin of receipt or the curtailment of diversions from the basin of origin depending upon the location of threatened or endangered species and their particular needs. Finally, one should not lose sight of the fact that the need for a Section 402 CWA permit will also trigger Section 401 state certification requirements which may independently serve to regulate flow regimes for the benefit of species if such water reallocations are allowed under state law. See PUD No. 1 v. Washington Dept. of Ecology, 511 U.S. 700 (1994).

One final "point source" case of recent vintage is Miccosukee Tribe v. South Florida Water Management District, 280 F.3d 1364 (11th Cir. 2002). In this instance, the Corps of Engineers had constructed a set of levies and canals which facilitated the drainage of a portion of Broward County, Florida, with defendant District managing the project. One component of the project was a series of three pipes through which large quantities of water with elevated phosphorus levels were pumped to another drainage basin. No one disputed that the pipes were point sources, but defendant contested plaintiff's assertion that there existed the requisite addition of a pollutant for which a permit would be required. Closely following the Second Circuit's lead in the Catskill Mountains case, supra, the Eleventh Circuit rejected the District's argument that there was no "addition" of a pollutant:

When a point source changes the natural flow of a body of water which contains pollutants and causes that water to flow into another distinct body of navigable water into which it would not have otherwise flowed, that point source is the cause-in-fact of the discharge of pollutants. And, because the pollutants would not have entered the second body of water but for the change in flow caused by the point source, an addition of pollutant from a point source occurs.

Miccosukee, 280 F.3d at 1368-69.

These three Circuit Court opinions suggest a trend towards expanding CWA jurisdiction over activities that were not regulated to date. As a consequence, these activities are also likely to receive greater ESA scrutiny. In addition to the prospect of a Section 9 "take" finding as a consequence of the discharge, the fact that a CWA permit is required will also trigger ESA Section 7 consultation in states where EPA administers the Section 402 program. In states that have assumed Section 402 programs, endangered species review on a permit by permit basis will occur under the programmatic Section 7 consultation conducted on the EPA decision to approve state program assumption. (This procedure is detailed in a recent memorandum of understanding between EPA, FWS, and NMFS. See 66 Fed. Reg. 11,202 (Feb. 22, 2001).) This could lead to the imposition of regulatory conditions with the same unintended consequences as identified above.

The Perspectives column of the Endangered Species Committee Newsletter includes opinion pieces designed to elicit discussion among committee members. If you would like to respond to points raised in this article for the next issue of the Endangered Species Committee Newsletter, please contact Cherise Gaffney, cmgaffney@stoel.com, or Sean Skaggs, sskaggs@mindspring.com.