Regulation of storm water discharges under the Clean water Act.

I. Introduction

The discharge of storm water into navigable waterways is recognized as a widespread problem responsible for much of the degradation of U.S. waterways. According to the U.S. Environmental Protection Agency (EPA), "pollution from diffuse sources, such as runoff from agricultural, urban areas, construction sites, land disposal and resource extraction, is cited by the States as the leading cause of water quality impairment."(1) The problem is difficult to solve primarily because storm water pollution is easily created: a discharge occurs whenever rainwater falls on contaminated soils or piles of materials containing pollutants; this storm water then carries the contaminants into waterways.

Due to the complexity of the problem, regulation by the government had been debated for many years. The Clean Water Act (CWA)(2) - specifically, its National Pollution Discharge Elimination System (NPDES)(3) - was the obvious means for regulation because it controls all discharges of pollutants into waterways. In the 1970s, however, EPA tried to exempt storm water discharges containing only uncontaminated storm water from regulation under the CWA.(4) Later, after being forced to address the problem, EPA developed a two-tiered regulatory scheme that required higher-priority sources of storm water discharges to apply for permits before December 31, 1987, and all other sources to apply six months later. This plan was eliminated by Congress in 1987 when amendments to the CWA were passed.(5) In 1987, Congress added section 402(p) to the CWA, requiring the regulation of storm water discharges and creating implementation timetables.(6)

After receiving over 3200 pages of comment on the proposed regulations and hosting six public meetings around the country, EPA promulgated the final storm water regulations on November 16, 1990.(7) As a result, storm water point-source discharges into navigable waterways have been brought into the fold of the CWA's National Pollution Discharge Elimination System.

Just as the size of the storm water discharge problem is huge, so too is the size and cost of its solution. It is very difficult to estimate the number of facilities affected by the storm water program. Prior to 1977, estimates placed the number of storm sewer point sources alone at over 100,000.(8) Congressman Roe estimated that approximately one million storm water discharge permits would be needed.(9) EPA estimated that the annual costs to the federal and state governments for administration of the storm water discharge program will exceed a half-million dollars.(10) The total costs to all other parties, including the permittees, has been estimated at $14 million annually.(11) Average costs of individual permits range from $1,000 for an individual industrial permit application to $77,000 for a large municipal system application.(12)

Due to the sizeable costs that will result from regulation, the permitting scheme created by the regulations drew fire in the form of litigation from both industry and environmental groups. In 1992, the Ninth Circuit Court of Appeals ventured into uncharted territory as the first court to address the validity of these regulations in Natural Resources Defense Council v. EPA and American Mining Congress v. EPA.(13) Both cases dealt with section 402(p) of the CWA(14) and EPA's regulations that implement and interpret this section.(15) The following is a review of the major issues resolved by the Ninth Circuit in these cases.(16)

II. American Mining Congress v. EPA(17)

A. Inactive Mining Sites Fall Within the Definition of

"Industrial Activity"

CWA section 402(p) requires permits for storm water "discharge[s] associated with industrial activity."(18) EPA, in the implementing regulations, defined "storm water discharge associated with industrial activity" as a "discharge from any conveyance which is used for collecting and conveying storm water and which is directly related to manufacturing, processing or raw materials storage areas at an industrial plant."(19) This definition includes "areas where industrial activity has taken place in the past and significant materials remain and are exposed to storm water."(20) The regulations specifically include active and inactive mining operations within the definition of industrial activities.(21) EPA's inclusion of inactive mining sites within the definition of industrial activities forces owners of inactive mining sites to obtain permits for any storm water discharges. As a result, the owners of inactive mines are treated virtually the same under the regulations as currently-operating industrial plant owners. The American Mining Congress (AMC) petitioned the Ninth Circuit for review of the regulations because it feared that its constituency - owners and operators of mines - will face large costs due to permitting.

In American Mining Congress v. EPA,(22) the Ninth Circuit made the following conclusions about EPA's interpretation of section 402(p): 1) It was reasonable and consistent with the CWA's intent, 2) It did not duplicate, vary, or frustrate the Abandoned Mining Lands program contained within the Surface Mining Control and Reclamation Act(23) (SMCRA), 3) It was not inconsistent with EPA's prior practice, 4) It did not impose retroactive liability, and 5) EPA was not required to consider the economic and administrative burdens when promulgating the rule. The remainder of this Section discusses four of these five holdings.

1. Statutory Intent

AMC argued to the Ninth Circuit that EPA's reading of section 402(p) in the regulations was contrary to congressional intent. In essence, AMC argued that "activity" plainly meant current activity.(24) Thus, EPA acted beyond the plain meaning of the statute when it included inactive mining sites within the meaning of a "discharge associated with industrial activity." In support of its argument, AMC contended that the legislative history "gave every indication ... that [Congress] intended to address abandoned mine lands through re-mining incentives" provided in the CWA(25) and not through the regulation of discharges.(26)

The court dismissed this argument, concluding that the language of the statute did not preclude the regulation of inactive mines merely because the CWA requires permits for discharges associated with industrial "activity."(27) In the court's opinion, AMC ignored the key words "associated with."(28) The court noted that AMC had conceded that mining was an industrial activity and that "Congress did not stipulate that the activity must occur concurrently with the discharge of storm water."(29)

The court's result was logically correct in its conclusion that inactive mines can be a source of current and future discharges and therefore regulation is justified under the language of the CWA. There is no language in the CWA that limits regulation to active mines. Although the court seemed to assume that Congress did not address the issue,(30) legislative history suggests that Congress intended to address abandoned mining sites under CWA section 402(p). For example, Rep. Clinger from Pennsylvania noted that a major water pollution problem was runoff from abandoned mines and supported the bill because he hoped it would prevent the mines from "sit[ting] there year after year, continuing to drain into the streams and rivers."(31)

In addition, EPA duly limited the scope of the regulations on inactive mines. EPA excluded certain inactive mines that may not be regulated efficiently, including: 1) inactive mines without an identifiable owner or operator, 2) those that have been "reclaimed" under SMCRA or other state laws, 3) those with minimal disturbances (such as those that are undisturbed or where mining operations are solely for the purpose of maintaining a claim), and 4) those where storm water does not come in contact with overburden or other materials.(32) As the court stated, the regulation of inactive mines is limited to "those sites at which storm water discharge is likely to have become contaminated through association with industrial activity."(33) The court correctly held that EPA was reasonable in its determination that inactive sites should be included "because some mining sites represent a significant source of contaminated storm water runoff."(34)

2. The Impact of the SMCRA on the CWA Storm Water

Scheme

AMC argued that inactive mines were meant to be regulated solely by SMCRA.(35) AMC noted the large sums of money that have been included in SMCRA's reclamation fund since its inception,(36) and argued that "[a] major focus" of the program was to regulate runoff from abandoned mines.(37)

The court dismissed this argument on three grounds. First, the court noted that SMCRA specifically states that it does not alter or supersede the CWA or state laws.(38) Second, the court reasoned that the amount of money available from the Abandoned Mine Lands program was irrelevant and, even if relevant, the fund did not come close to providing the amount of money needed to clean up all coal mining sites.(39) Finally, [p]rior to the actual reclamation ... the Abandoned Mine Lands program does nothing to regulate the discharge of pollutants from abandoned mine lands."(40) Thus, the Ninth Circuit ruled that the regulation of inactive mining sites under the CWA was consistent with the Abandoned Mine Lands program of the SMCRA.

3. Consistency with Prior EPA Practices

AMC contended that since EPA had only regulated active mines in the past, it was inconsistent and contradictory for EPA to regulate inactive mines now. The court held that even though EPA had not promulgated regulations for inactive mines in the past, inactive mines are not automatically exempt from permit requirements.(41) The absence of regulations for permits only means that permits must be developed on a case-by-case basis.(42)

The internal consistency of EPA's regulations lends support to the holding of the court. Like the explicit inclusion of inactive mining sites, the present rules affecting "discharges associated with industrial activity" at industrial facilities apparently will include those parts of industrial sites that are no longer being used actively.(43) It appears, therefore, that the inclusion of inactive mines and the rules affecting industrial facilities are at least internally consistent and not arbitrary.(44)

4. Absence of Retroactive Liability

AMC argued that requiring permits for discharges from inactive mines imposed retroactive liability and was, therefore, not permissible under the CWA. Conceding that Congress can create statutes that impose retroactive ability, AMC argued that courts presume statutes are prospective and only construe statutes as retroactive when it is the "manifest intention of the legislature" expressed in an "unequivocal and inflexible" manner in an act's language.(45) Therefore, EPA could permissibly promulgate storm water regulations with retroactive liability only if the CWA contained an "express authorization" of retroactivity, which it did not.(46) Lastly, AMC argued that principles of fairness and equity limit the use of retroactive liability, and that it would be unfair to impose liability on current owners of sites when the mining was conducted many years ago by a different party.(47)

The court agreed in part with AMC's arguments, but held that the regulations only imposed liability for future discharges from the mines, so the regulations were not retroactive at all. These regulations do not alter "the past legal consequences of past actions,"(49) thus, the regulations are like any that have an "exclusively future effect."(50)

Once again, the court's reasoning is supported by the practical results of the regulations. Wastes from a discontinued mining operation that have been sitting around for a long time may leach and create discharges when storm water runs over them, but the mining operation owner is not liable for the wastes or storm water discharges that occurred from the time the wastes were put there up to the time of the regulations' enactment. Owners of mining operation are only liable if they leave the wastes in a condition such that discharges occur after the date of the enactment of EPA's storm water regulations. The fact that owners may have to put in place treatment systems or new management systems because of the rule does not make the rule retroactive.(51)

B. Coal Mines Reclaimed Under the SMCRA Interim

Program Are Included in the Regulations

EPA exempted from the NPDES scheme mines that were reclaimed under SMCRA's permanent program regulations, but did not exempt coal mines that were reclaimed under SMCRA's interim program.(52) AMC maintained that once a site was reclaimed under SMCRA, it should be excluded from the storm water permit process, regardless of whether the reclamation was done under the interim or permanent program.(53) The Ninth Circuit ruled that EPA's interpretation was not arbitrary or capricious. The court thought that the differences between the two SMCRA programs(54) were sufficiently important to warrant different treatment by the EPA.(55)

C. Coal Mines Reclaimed Under State Laws Prior to SMCRA

Are Included in the Regulatory Scheme

EPA chose not to exempt coal mines that were reclaimed under state laws that operated prior to SMCRA.(56) AMC argued that this was an arbitrary decision on EPA's part because EPA had provided "no basis for its rulemaking determination."(57) The Ninth Circuit upheld EPA's determination, noting that an important reason for enacting SMCRA was that "existing state laws were not effectively addressing environmental damage caused by mining."(58)

D. Noncoal Mines Reclaimed After December 1990 Are

Excluded from Regulation

EPA exempted noncoal mines that have been, and will be, reclaimed under state or federal laws after the effective date of EPA's rule.(59) AMC challenged EPA's choice of exemption date.(60) AMC thought that the date chosen was arbitrary and capricious because a mine reclaimed a day before the effective date would not be exempt, while a mine reclaimed a day later would be exempt.(61) AMC thought that an exemption should be provided if the reclamation was completed in compliance with federal requirements, even if the mine was reclaimed before the effective date.(62) The Ninth Circuit upheld the date chosen by EPA as reasonable, noting that all deadlines create an anomalous result near the cut-off date; this alone does not make the date arbitrary.(63)

III. Natural Resources Defense Council v. EPA(64)

A. Oil and Gas Facilities - Where Storm Water Is

Uncontaminated - Are Exempted from Regulation

EPA's new storm water rule exempts oil and gas activities from permitting requirements where storm water does not come in contact with machinery or other activities that may cause contamination.(65) The final regulation states that

[t]he operator of an existing or new discharge composed entirely of storm water from an oil or gas exploration, production, processing, or treatment operation, or transmission facility is not required to submit a permit application in accordance with ... this section, unless the facility: A) Has had a discharge of storm water resulting in the discharge of a reportable quantity for which notification is or was required ... or (C) Contributes to a violation of a water quality standard.(66)

This rule was created pursuant to two subsections of the CWA. First, section 402(p) requires storm water permits for "discharge[s] associated with industrial activity."(67) Second, section 402(l) specifically exempts storm water discharges from mining and oil and gas operations if the discharges are "composed entirely of flows ... which are not contaminated by contact with, or do not come in contact with," any materials or waste products."(68)

In Natural Resources Defense Council u. EPA,(69) the Natural Resources Defense Council (NRDC) objected to EPA's exemption for oil and gas activities on three grounds. All three general arguments focused on the disparity of treatment between oil and gas operations and mining operations. The regulations require owners of oil and gas facilities to apply for a permit only if the facility has a discharge of a reportable quantity,(70) whereas mining operators must submit applications whenever storm water comes into contact with overburden or other listed materials.(71)

NRDC first argued that the plain meaning of the CWA required equal treatment for mining operations and oil and gas operations. NRDC pointed to section 402(l)(2) which treats oil, gas, and mining operations the same.(72) Both types of facilities, according to NRDC, should be exempt from the permit requirements only if the discharges showed no "contamination."(73)Thus, NRDC alleged that EPA defined the CWA term "contamination" incorrectly with respect to oil and gas operations.(74)

Secondly, NRDC argued that the legislative history required the same definition of "contamination" for oil, gas, and mining facilities. NRDC pointed out remarks of congressmen that suggest that exemptions for all operations - whether oil and gas or mining - were intended to apply only "if the discharges were entirely free of contaminants."(75) In addition, NRDC focused on the House conference report and argued that EPA could not use reportable quantities as the threshold above which oil and gas operation discharges would be regulated.(76)

Third, NRDC argued that the exemption was overly broad and it would exempt large quantities of pollutants. In support of its argument, NRDC pointed out a practical consequence of the requirement: as much as 5000 pounds of some hazardous substances could be discharged before the "reportable quantity" threshold was met, and thus, before a permit would be required.(77)

The Ninth Circuit disagreed with NRDC's assessment of the regulatory scheme. The court, relying on the same conference report cited by NRDC,(78) held that "the [conference] report is clear that the determination of whether storm water is contaminated is within the [EPA) Administrator's discretion."(79)

B. Exemption for "Light Industries" Where Storm Water Is

Uncontaminated Struck Down

In the new regulations, EPA exempted so-called "light industries" from the definition of "associated with industrial activity" if storm water does not come in contact with these industrial activities.(80) "Light industries" include businesses with certain Standard Industrial Classification (SIC) numbers such as "manufacturers of pharmaceuticals, paints, varnishes, lacquers, enamels, machinery, computers, electrical equipment, transportation equipment, glass products, fabrics, furniture, paper board, food processors, printers, jewelry, toys, and tobacco products."(81) These facilities must acquire a permit for storm water runoff only if there are areas "where material handling equipment or activities, raw materials, intermediate products, final products, waste materials, by-products, or industrial machinery at these facilities are exposed to storm water."(82)

EPA justified this exclusion for light industries because "most of the activity at these types of manufacturers takes place indoors, and that emissions from stacks, use of unhoused manufacturing equipment, outside material storage or disposal, and generation of large amounts of dust and particles will all be minimal."(83) EPA determined that "these industries are more akin or comparable to businesses, such as retail, commercial, or service industries ... and storm water discharges from these facilities are not |associated with industrial activity.'"(84)

NRDC argued that this exemption should be struck down as over-broad.(85) NRDC argued that EPA should follow the lead of the SIC Manual: EPA should label businesses "nonindustrial" if they are truly nonindustrial.(86) The categories of businesses determined by EPA to be nonindustrial(87) are categorized in the manufacturing category in the SIC manuals.(88) Whereas, in the SIC Manual, "manufacturing" businesses are in a separate classification division than retail, commercial, and service businesses - those businesses traditionally considered nonindustrial.(89)

NRDC's second argument was that EPA wrongly used administrative burden to justify the exclusions. According to NRDC, EPA's use of administrative burden as a justification for exclusion from regulation was rejected in NRDC v. Costle.(90) What EPA had done in determining regulated industries was to impermissibly focus on whether storm water discharges created water quality problems instead of regulating all discharges based upon the origin of a storm water discharge.(91) In support of this, NRDC noted the bill which Congress finally adopted and relied upon EPA's own statements.(92)

The Ninth Circuit agreed with NRDC to some extent and struck down EPA's exclusion of certain SIC categories from the definition of "associated with industrial activity." The court held that EPA did not provide any facts in the record to support its determination, therefore, it was arbitrary for EPA to include this added criteria in the case of "light industries" when other industries are presumed to be discharging contaminated storm water.(93) According to the court, this definition wrongly placed the burden on the permitting agency instead of forcing a facility to prove that they are in compliance.(94) Furthermore, the court held that legislative intent was to exclude only those parts of industrial complexes that are completely nonindustrial, such as administration buildings, not to exclude industries that are supposedly less industrial.(95)

C. Exemption for Construction Sites Under Five Acres Struck

Down

EPA included construction operations disturbing more than five acres of land in the definition of "associated with industrial activity."(96) EPA decided that "[c]onstruction activity at a high level of intensity is comparable to other activity that is traditionally viewed as industrial, such as natural resource extraction."(97) In addition, EPA noted that runoff from these operations has the "potential for serious water quality impacts and reflects an activity that is industrial in nature."(98)

EPA chose a five-acre threshold for two major reasons. First, EPA wanted to limit the amount of permit applications. EPA stated, without explanation, that "administrative concerns" were a main reason for the limit.(99) Secondly, EPA said that "the acreage limit [was] appropriate for identifying sites that are [sic) amount to industrial activity," and that the choice reflects "an earth disturbance and/or removal that is industrial in magnitude."(100)

NRDC pointed out that EPA had conceded that construction was an industrial activity.(101) NRDC argued that the exemption was wrongful because EPA did not have the power to exempt any discharges associated with industrial activity.(102) Secondly, NRDC argued that the five-acre limit was arbitrary, especially in light of an acknowledgement by EPA that "[e]ven small construction sites may have a significant negative impact on water quality in localized areas."(103) The Ninth Circuit agreed with NRDC and struck down this part of the regulations. The court noted that EPA conceded that construction was an industrial activity, and therefore, EPA could not create exemptions from the permitting requirements.(104) Furthermore, the court agreed with NRDC that a five-acre limit was arbitrary due to the lack of factual findings by EPA and due to the admission that even small sites may have a significant impact.(105)

D. The Definition of Municipal Separate Storm Sewer

Systems Upheld

The 1987 amendments to the CWA created a regulatory scheme for storm water discharges from municipal storm sewer systems that are separate from regular sewer systems. The regulations and the statute have different timetables for permitting based upon the municipalities' size.(106) Since 1972, the CWA has contained a definition of "municipality."(107) The definition included cities, towns, counties, and other public bodies that have jurisdiction over the disposal of sewage and other wastes.(108) When EPA defined "municipal separate storm sewer," it echoed the language of this definition in the statute.(109) When EPA defined large and medium "municipal separate storm sewer systems" that served a certain size population, however, it added factors including the incorporation status of the municipality.(110)

NRDC challenged these definitions, claiming that they were under-inclusive. First, NRDC argued that, since the definition of the term "municipal" was already provided in the statute, EPA's deviation when developing definitions for "large and medium municipal separate storm sewer systems" was impermissible. NRDC argued that EPA ignored the plain language of the CWA.(111) Second, NRDC took issue with the fact that EPA took its own work load into account.(112) Third, NRDC contended that it was incorrect to leave out unincorporated municipalities(113) because Congress had intended population to be the sole criteria to determine what storm sewer systems are to be regulated.(114) Fourth, NRDC objected to the use of 1980 census figures - instead of either 1990 census figures or 1986 federal government population figures - to determine what counties specifically fall within the two size categories.(115)

EPA's definition was upheld by the Ninth Circuit.(116) The court found that the term "municipal separate storm sewer system serving a population" was ambiguous.(117) Since this issue was not addressed by Congress, EPA's determination deserved deference from the courts.(118) However, the court disagreed that EPA took into account impermissible concerns when defining the term.(119) The court reasoned that because the statute did not specifically prohibit EPA from factoring in its work load when developing the regulations, it was permissible for EPA to do so.(120) Because EPA "proceeded on the reasonable assumption that cities possess the police powers needed effectively to control land use within their borders" - such that they are suited to implement the program - the court upheld EPA's use of incorporation as a factor in the definition of municipal storm sewer systems, thereby rejecting NRDC's third argument.(121) The court dismissed NRDC's fourth argument as quickly. Since EPA's definition warranted deference, the court supported it and the factors that EPA used in it. The court upheld EPA's use of 1980 census figures because the choice was rational, although perhaps not the best decision.(122)

IV. CONCLUSION

EPA's new storm water discharge permit regulations were, for the most part, upheld by the Ninth Circuit Court of Appeals against challenges by both industry and environmental groups. Notably, the court struck down EPA's rules regarding exemptions for "light industries"(123) because EPA lacked factual findings. In addition, the court struck down the exemption for construction sites disturbing less than five acres of land(124) because EPA does not have the power to exempt operations that are admittedly industrial activities. (1.) National Pollution Discharge Elimination System Permit Application Regulations for Storm Water Discharges, 55 Fed. Reg. 47,990, 47,991 (1990) [hereinafter NPDES Storm Water Permits] (citing National Water Quality Inventory, 1988 Report to Congress (1988)). (2.) Clean Water Act (CWA), 33 U.S.C. [sub-section] 1251-1386 (1988). (3.) CWA [section] 402, 33 U.S.C. [section] 1342 (1988). (4.) Natural Resources Defense Council v. Costle, 568 F.2d 1369, 1372 n.5 (D.C. Cir. 1977) (citing 40 C.F.R. [section] 125.4 (1975)). Costle held that EPA does not have the authority to exempt categories of point sources from the requirements of CWA [section] 402. Id. at 1377. (5.) Congress amended the Clean Water Act with the Water Quality Act of 1987, Pub. L. No. 100-4, 101 Stat. 7 (codified as amended in scattered sections of 33 U.S.C. [sub-section] 1251-1386). (6.) 33 U.S.C. [section] 1342(p). (7.) NPDES Stormwater Permits, supra note 1, at 47,994. (8.) Natural Resources Defense Council v. Costle, 568 F.2d 1369, 1380 (D.C. Cir. 1977). (9.) 133 Cong. Rec. H190 (daily ed. Jan. 8, 1987). (10.) 55 Fed. Reg. at 48,061. (11.) Id. (12.) Id. (13.) American Mining Congress v. EPA, 965 F.2d 759 (9th Cir. 1992); Natural Resources Defense Council v. EPA, 966 F.2d 1292 (9th Cir. 1992). (14.) 33 U.S.C. [section] 1342(p). (15.) 40 C.F.R. [section] 122.26 (1991). (16.) Both cases were direct, facial challenges to the EPA's regulations initiated in the Ninth Circuit Court of Appeals. "Any interested person" can obtain judicial review of promulgated rules in federal Circuit Courts of Appeal under 33 U.S.C. [section] 1369(b). Accordingly, neither case has a factual background. (17.) 965 F.2d 759 (9th Cir. 1992) (AMC). (18.) CWA [section] 402(p)(3)(A), 33 U.S.C. [section] 1342(p)(3)(A). (19.) 40 C.F.R. [section] 122.26(b)(14). (20.) Id. (21.) Id. [section] 122.26(b)(14)(iii). (22.) 965 F.2d 759 (9th Cir. 1992). (23.) 30 U.S.C. [sub-section] 1231-1243. (24.) Brief for American Mining Congress (AMC) at 18-19, American Mining Congress v. EPA, 965 F.2d 759, 764 (9th Cir. 1992) (No. 91-70176). (25.) See CWA [section] 301(p), 33 U.S.C. [section] 1311(p). (26.) Brief for AMC at 22. (27.) American Mining Congress v. EPA, 965 F.2d 759, 764 (9th Cir. 1992). See CWA [section] 402(p)(2)(B), 33 U.S.C. [section] 1342(p)(2)(B). (28.) AMC, 965 F.2d 759, 764 (9th Cir. 1992). (29.) Id. at 764. (30.) See id. at 765. (31.) 133 Cong. Rec. H178 (daily ed. Jan. 8, 1987). (32.) 40 C.F.R. [section] 122.26(b)(14)(iii). (33.) American Mining Congress v. EPA, 965 F.2d 759, 765-66 (9th Cir. 1992). (34.) NPDES Storm Water Permits, supra note 1, at 48,033; AMC, 965 F.2d at 765. (35.) Brief for AMC at 27; SMCRA promotes reclamation of former coal mines by granting money to states for use in clean-up efforts. See 30 U.S.C. [sub-section] 1204-1328. Under recent amendments to the SMCRA, the use of Abandoned Mine Lands program funds was expanded. SMCRA was amended by the Act of Nov. 5, 1990, Pub. L. No. 101-508, 104 Stat. 1388-296 (codified as amended at 30 U.S.C. [sub-section] 1231-1237, 1239, 1240a, 1241-1243, 1257, 1302). Funds can now be used for noncoal mining sites once all eligible coal mining sites in each state have been reclaimed. 30 U.S.C. [section] 1240a (amended 1990). Thus, AMC argued that SMCRA is broad enough to handle the reclamation of both coal and non-coal mines. (36.) The Interior Department has estimated that the fund will have reached three million dollars by August 1992. H.R. Rep. No. 294, 101st Cong., 1st Sess. 13 (1989). (37.) Brief for AMC at 27. (38.) American Mining Congress v. EPA, 965 F.2d 759, 766 (9th Cir. 1992) (citing 30 U.S.C. [section] 1292(a)). (39.) Expected costs of cleanup were $7-10 billion. Id. at 766 (citing H.R. Rep. No. 218, 95th Cong., 1st Sess. 135, reprinted in 1977 U.S.C.C.A.N. 593, 667). (40.) AMC, 965 F.2d at 767. (41.) Id. (42.) Id. (43.) 40 C.F.R. [section] 122.26 (14). (44.) See NPDES Storm Water Permits, supra note 1, at 48,008. (45.) Brief for AMC at 23 (citing Greene v. United States, 376 U.S. 149, 160 (1964)). (46.) Brief for AMC at 23 (citing Bowen v. Georgetown University Hospital, 488 U.S. 204, 213 (1988)). In support of its argument, AMC relied on a line of cases that allowed the imposition of retroactive liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. [sub-section] 9601-9675 (1988), and distinguished the CWA by pointing out that CERCLA's entire purpose was remedying past contamination, whereas [section] 402(p) of the CWA only regulated "industrial activity." Brief for AMC at 25. AMC revived its earlier argument and added to it: since the CWA was meant to attack only current activity and not inactive mines, it is proactive, not retroactive, and, thus, it is unlike CERCLA. Id. (47.) Brief for AMC at 25-26 (citing Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 17 (1976), for the proposition that due process concerns favor prospective legislation). (48.) American Mining Congress v. EPA, 965 F.2d 759, 770 (9th Cir. 1992). (49.) Id. (50.) Id. (citing Bowen, 488 U.S. at 477 Scalia, J., concurring)). (51.) Id. (52.) 40 C.F.R. [section] 122.26(b)(14)(iii). See 30 C.F.R. [sub-section] 710-725 (1992) (SMCRA's interim program). (53.) Brief for AMC at 45; SMCRA, "which regulates mining and post-mining operations, established a two-tiered program consisting of an interim, or initial, regulatory program, and a permanent regulatory program." American Mining Congress v. EPA, 965 F.2d 759, 770 (9th Cir. 1992) (citing 30 U.S.C. [section] 1251). Although the initial program standards were promulgated in 1977 and the permanent program regulations were developed in 1979, many states continued to use the initial program until 1982. Brief for AMC at 45. AMC argued that the interim program and the permanent program used the same substantive performance standards and the only substantive difference between the programs was their performance bond requirements. Brief for AMC at 45 (citing standards for the interim program at 30 C.F.R. [section] 715 and standards for the permanent program at 30 C.F.R. [section] 816). Therefore, according to AMC, mines reclaimed under either SMCRA program should be treated equally. (54.) The Court noted the differences between the final program and the interim program of SMCRA, including the final program's requirement of five to ten years of post-reclamation care. Cf. 30 U.S.C. [section] 1265(b)(20) and 30 U.S.C. [section] 1252(c). The Court also noted the performance bond requirement. See 30 C.F.R. [section] 800.11. (55.) AMC, 965 F.2d at 768. (56.) See 40 C.F.R. [section] 122.26(b)(14)(iii). (57.) Brief for AMC at 47; see AMC, 965 F.2d at 768-69. (58.) American Mining Congress v. EPA, 965 F.2d 759, 768-69 (9th Cir. 1992) (citing H.R. Rep. No. 218, 95th Cong., 1st Sess. 58 (1977), reprinted in 1977 U.S.C.C.A.N. 593, 596, 661). (59.) NPDES Storm Water Permits, supra note 1, at 48,033. (60.) Strangely enough, while AMC challenged EPA's regulation of coal mines reclaimed under older state laws, it did not challenge EPA's regulation of non-coal mines reclaimed under older state or federal laws. 965 F.2d at 769. AMC simply challenged EPA's decision to exempt those non-coal mines reclaimed after the effective date of the rule. Id. (61.) Id. (62.) Brief for AMC at 47-48. (63.) American Mining Congress v. EPA, 965 F.2d 759, 769 (9th Cir. 1992). (64.) 966 F.2d 1292 (9th Cir. 1992) (NRDC). (65.) See 40 C.F.R. [section] 122.26(c)(1)(iii) (1991). (66.) 40 C.F.R. [section] 122.26(c)(1)(iii). (67.) 33 U.S.C. [section] 1342(p). (68.) 33 U.S.C. [section] 1342(l)(2) (emphasis added). (69.) 966 F.2d 1292 (9th Cir. 1992). (70.) The idea of "reportable quantities" or "RQs" comes from CWA [section] 311(b)(4), 33 U.S.C [section] 1321(b)(4). (71.) NRDC, 966 F.2d at 1307. NRDC argued that the threshold above which oil and gas operations are regulated is higher than the threshold above which mines are regulated. The mining rule provides that an "operator of an existing or new discharge composed entirely of storm water from a mining operation is not required to submit a permit application unless the discharge has come into contact with any overburden, raw material, intermediate products, finished product, byproduct or waste products located on the site of such operations." 40 C.F.R. [section] 122.26(c)(1)(iv). (72.) 33 U.S.C. [section] 1342(l)(2). (73.) Brief for NRDC at 45, Natural Resources Defense Council v. EPA, 966 F.2d 1292 (9th Cir. 1992) (No. 91-70200); 966 F.2d at 1307. The term "contamination" arose from 33 U.S.C. [section] 1342(l)(2). See supra note 69 and accompanying text. (74.) Brief for NRDC at 45. (75.) NRDC, 966 F.2d at 1307; Brief for NRDC at 45-46. (76.) NRDC tried to bolster its argument by alleging that the legislative history limited the use of reportable quantities to determine when "contamination" occurs, as opposed to when a discharge occurs. Brief for NRDC at 46. NRDC and the court focused on the part of the conference report that provides permits are not required where stormwater runoff is diverted around mining operations or oil and gas operations and does not come in contact with overburden, raw material, product, or process wastes. In addition, where stormwater runoff is not contaminated by contact with such materials, as determined by the Administrator, permits are also not required. With respect to oil or grease or hazardous substances, the determination of whether stormwater is "contaminated by contact with" such material, as established by the Administrator, shall take into consideration whether these materials are present in such stormwater runoff in excess of reportable quantities under section 311 of the Clean Water Act ... or in the case of mining operations, above natural background levels. H.R. Rep. No. 1004, 99th Cong., 2d Sess. 151 (1986) (emphasis added). NRDC alleged that the use of "reportable quantities" - in determining whether contamination existed - was meant to be considered along with other factors and it was not meant to be the sole factor. Brief for NRDC at 46-47. In addition, reportable quantities should only be used for a limited number of substances - oil, grease and hazardous substances - and not for other pollutants, such as salts and heavy metals. Id. (77.) Brief for NRDC at 45. (78.) Natural Resources Defense Council v. EPA, 966 F.2d 1292, 1307 (9th Cir. 1992). While NRDC focused on the language "reportable quantities shall be taken into consideration," the court relied on the language "as determined by the Administrator" and arrived at a different conclusion. See text of conference report, supra note 77. (79.) NRDC, 966 F.2d at 1307. (80.) 40 C.F.R. [section] 122.26(b)(14). (81.) NRDC, 966 F.2d at 1304 (citing NPDES Storm Water Permits, supra note 1, at 48,000). (82.) 40 C.F.R. [section] 122.26(b)(14). (83.) Natural Resources Defense Council v. EPA, 966 F.2d 1292, 1304 (9th Cir. 1992) (citing NPDES Storm Water Permits, supra note 1, at 48,008). (84.) NPDES Storm Water Permits, supra note 1, at 48,008. (85.) In effect, the SIC categories listed in the regulations will fall within the definition of "associated with industrial activity," only if they meet exposure criteria, while all other categories listed in the regulations need not meet this added criteria. More specifically, those SIC categories of industries listed in 40 C.F.R. [section] 122.26(b)(14)(xi) are "industrial activity" only if they are exposed to storm water. However, the materials, products, or by-products from all other categories - those listed in [section] 122.26(b)(14)(i)-(x) - do not need to be exposed to storm water in order to be considered "associated with industrial activity." (86.) Brief for NRDC at 40-42, See NRDC, 966 F.2d at 1305. (87.) That is, those industries falling under the SIC numbers listed in 40 C.F.R. [section] 122.26(b)(14)(xi); See NRDC, 966 F.2d at 1305. (88.) NRDC pointed out that the truly non-industrial businesses such as retail, commercial, and service industries are in SIC Divisions "G," "H," and "I," while those listed considered "light industry" in 40 C.F.R. [section] 122.26(b)(14)(xi) are in the SIC Division "D" category called "Manufacturing." Brief for NRDC at 42. (89.) Brief for NRDC at 41-42. 90.) 568 F.2d 1369 (D.C. Cir. 1977). See supra note 4 and accompanying text. (91.) Brief for NRDC 37-40; Natural Resources Defense Council v. EPA, 966 F.2d 1292, 1305-06 (9th Cir. 1992). (92.) Brief for NRDC at 39 (citing NPDES Storm Water Permits, supra note 1, at 47,999). (93.) NRDC, 966 F.2d at 1305. EPA's justification that discharges from light industries would be minimal was insufficient to uphold the rule. Id. In dissent, Judge O'Scannlain thought EPA's definition was reasonable. He conceded that the exempted activities were generally considered "manufacturing" and industrial activity, but he stated that this did not require finding that these categories had to be included within the definition of "associated with industrial activity." Id. at 1313. Judge O'Scannlain thought that EPA had discretion to define the terms "associated with" and "directly related," and therefore, EPA's determination should have been upheld as reasonable. Id. at 1314 (citing Chevron v. NRDC, 467 U.S. 837, 843 n.9 (1984)). (94.) NRDC, 966 F.2d 1292, 1314 (9th Cir. 1992). (95.) Id. at 1304. During debates in the House, Rep. Hammerschmidt gave some examples of what would be considered "associated with industrial activity" and what would not: "[d]ischarges which do not meet this definition include those discharges associated with parking lots and administrative and employee buildings." 133 Cong. Rec. H170 (daily ed. Jan. 8, 1987). The Court found that "the examples given - parking lots and administrative buildings - indicate that the intent was to exclude only those facilities or parts of a facility that are completely non-industrial." NRDC, 966 F.2d at 1304. (96.) 40 C.F.R. [section] 122.26(b)(14)(x). (97.) NPDES Storm Water Permits, supra note 1, at 48,033. Thus, EPA likened large construction operations to mining. (98.) Id. (99.) Id. at 48,036. (100.) Id. (101.) Brief for AMC at 43; Natural Resource Defense Council v. EPA, 966 F.2d 1292, 1305 (citing NPDES Storm Water Permits, supra note 1, at 48,033). (102.) See supra, note 91 and accompanying text. (103.) Brief for AMC at 43 (citing NPDES Storm Water Permits, supra note 1, at 48,033). (104.) NRDC, 966 F.2d at 1306. See supra note 4. (105.) NRDC, 966 F.2d at 1306. In his dissent, Judge O'Scannlain disagreed with the import of the statement by EPA that small sites may have a significant impact. Id. at 1314 n.3. In his view, construction may not be "industrial" at all and therefore, it was permissible for EPA to determine that sites of a certain size could be deemed industrial and hence fall within the statute. Id. at 1315. Judge O'Scannlain noted that there were three approaches that could have been used to

determine whether a construction site is industrial activity: length of construction time, quantity of soil displaced by the activity, and site area. Id. The judge noted that EPA's rule contained "little in the way of justification" for the five-acre limit, but he thought that this did not make the rule arbitrary. Id. (106.) See CWA [section] 402(p)(2)(d), 33 U.S.C. [section] 1342(p)(2)(d). (107.) CWA [section] 502(4), 33 U.S.C. [section] 1362(4). (108.) Id. (109.) See 40 C.F.R. [section] 122.26(b)(8). (110.) See id. [section] 122.26(b)(4), (7). (111.) Natural Resources Defense Council v. EPA, 966 F.2d 1292, 1302 (9th Cir. 1992); Brief for NRDC at 23-26. NRDC noted that at least 411 municipalities with populations over 100,000 would be excluded under the regulation. Id. at 26. (112.) NRDC, 966 F.2d at 1303; Brief for NRDC at 27. (113.) Brief for NRDC at 26, 29; NRDC, 966 F.2d at 1303. (114.) Brief for NRDC at 30. For example, NRDC noted that three million people living in Los Angeles County, California, will be excluded from the regulatory categories. Brief for NRDC at 32-33. NRDC went on to list huge sections of major metropolitan areas that would be excluded, such as 2.6 million people from the Boston suburbs and 2.3 million from the Philadelphia suburbs. Id. at 30 n.30. In addition, NRDC pointed out anomalous results that would occur across the country because of the rule, such as the exclusion of very populous counties. Id. at 31 n.32. (115.) NRDC, 966 F.2d at 1303-04; Brief for NRDC at 33-34. The specific counties were listed in appendices F and G to the regulations. (116.) Natural Resources Defense Council v. EPA, 966 F.2d 1292, 1304 (9th Cir. 1992). (117.) Id. at 1302. (118.) Id. at 1302-03. (119.) Id. at 1303. (120.) Id. at 1304. (121.) Natural Resources Defense Council v. EPA, 966 F.2d 1292, 1303 (9th Cir. 1992) (citing NPDES Storm Water Permits, supra note 1, at 48,039, 48,043. (122.) NRDC, 966 F.2d at 1304-05. (123.) See 40 C.F.R. [section] 122.26(b)(14) (1991). (124.) See id. [section] 122.26(b)(14)(x).