Seventh Circuit Rules Environmental Group Did Not Have Standing

In a long-awaited case dealing with general permits for construction, the Seventh Circuit Court of Appeals handed down a significant victory for NAHB in the stormwater Construction General Permit case ("CGP"), Texas Independent Producers & Royalty Owners Ass'n v. EPA.

In July 2003, after much input from NAHB, the EPA issued its Construction General Permit (CGP). The permit allows owners of construction sites, in states where EPA issues Section 402 permits, to discharge storm water upon the completion of storm water pollution prevention plan (SWPPP) and the submittal of a notice of intent (NOI). Individual review or notice and comment on every project is not required under the terms of the CGP. In the Seventh Circuit Court of Appeals, NAHB both challenged the CGP affirmatively and defended it from attack by NRDC. Last summer, following extensive negotiations, NAHB and the EPA settled NAHB’s challenges to the CGP. After that settlement, NAHB re-aligned as an intervenor to defend the CGP from NRDC’s challenges, which would have made it a much more demanding permit.

NRDC made three main arguments in its challenge against the CGP: 

First, NRDC attacked the terms of the permit. Specifically, NRDC argued that the CGP unlawfully allows discharges of storm water that do not meet the requirements of the Clean Water Act (CWA) and that the EPA needed to review every NOI and SWPPP. 

 The Seventh Circuit did not reach NRDC’s first argument because it found that NRDC did not have “standing” to bring the claim. Though the court recognized that certain NRDC members may have been injured by polluted water bodies, it found that none of those injuries were “fairly traceable” to actions taken by either the EPA or construction site operators. The court seemed to be concerned with the veracity of some of NRDC’s claims. For example, NRDC claimed that some of its members could not use the Potomac and Anacostia Rivers because of the sediment loading. However, the court explained that NRDC has ignored that those rivers are polluted by “3.2 billion gallons of untreated raw sewage that flows into [them] each year.” Because the court ruled that NRDC lacked standing, it did not reach NRDC’s arguments pertaining to the terms of the permit.

Second, NRDC argued the EPA procedurally violated the CWA by only holding a few public hearings and conducting a notice and comment process before issuing the CGP. NRDC believed that the CWA required the EPA to allow the public to participate in every NOI and SWPPP.

The court found that NRDC had standing to bring its second “procedural” argument. However, the court held that the EPA’s interpretation of the CWA was reasonable, and therefore a public hearing was not required for every NOI and SWPPP. The Clean Water Act allows the EPA to issue a permit only “after opportunity for public hearing.” The court, however, understood that “NOIs and SWPPPs are neither permits or permit applications.”

Third, NRDC wanted each construction site operator to comply with the Endangered Species Act section 7 consultation requirements. 

The Seventh Circuit explained that the ESA “consultation” requirements only attach to “federal actions.” It recognized that “a private actor . . . files an NOI and creates a SWPPP, and neither the filing of an NOI nor the creation of a SWPPP by a private contractor requires any federal action.” Thus, the court held that the ESA’s consultation requirements are not triggered.

To read a copy of the Seventh Circuit opinion, please click on the following link, or copy it into your browser: 

http://www.ca7.uscourts.gov/fdocs/docs.fwx?submit=showbr&shofile=03-3277_018.pdf

If you would like further information on this case, please contact Tom Ward, Assistant Staff Vice President - NAHB at 800-386-5242, x8230 or via e-mail at tward@nahb.com.

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