Yesterday, in a 7-1 decision with Justice Scalia the lone dissenter, the U.S. Supreme Court handed a major victory to the forest products industry.  As it does so often, the Court reversed a Ninth Circuit ruling that had required Clean Water Act (CWA) permits for sediment laden stormwater that runs off of logging roads.  The Court concluded that deference should be given to EPA, which had interpreted its regulation to exclude these types of stormwater discharges. The cases decided by the Court in yesterday’s ruling stemmed from lawsuits originally brought in 2006  by the Portland based environmental group, Northwest Environmental Defense Center (NEDC).  NEDC had filed the lawsuits alleging that Oregon officials violated the CWA by allowing the discharge of stormwater runoff from logging roads without appropriate permits.  The environmental group claimed that the stormwater draining from the Oregon logging roads constituted discharges associated with industrial activity, which requires a permit.  Pursuant to Oregon law, the logging roads at issue were specifically constructed with a system of ditches, culverts, and channels that collect and convey stormwater runoff, and in certain cases, delivered this water into adjacent water bodies.

Under the CWA, individuals, corporations, and governments are required to obtain a National Pollutant Discharge Elimination System (NPDES) permit before discharging pollutants from any point source into waters of the United States.  A point source is any “discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit . . . from which pollutants are or may be discharged.”  33 U.S.C. § 1362(14).  Subsequent amendments to the CWA narrowed the NPDES permitting scheme to require permits only for those point source discharges associated with industrial activity.  Diffuse sources of water pollution, like logging activity runoff, were deemed by Congress to be non-point sources, which are left to the states to control.

Oregon’s rules are consistent with EPA rules and regulations (the Silvicultural Rule (40 CFR § 122.27(b)(1) and the Industrial Stormwater Rule (40 CFR §122.26(b)(14) (2006)) designed to better define the categories of discharges that qualified as point sources and the types of industrial activities that were to be might be regulated.

In a controversial 2010 ruling, the Ninth Circuit agreed with NEDC that stormwater runoff from logging roads is a discharge associated with industrial activity and requires a permit where that runoff is collected in roadside ditches and culverts before being discharged into U.S. waters.  The ruling was celebrated by environmental groups, but seen by the timber industry as a reversal of longstanding EPA policy.  Industry was rightly concerned that the ruling would require them to obtain permits and implement costly and burdensome management practices, thereby exposing them to citizen suits for any alleged noncompliance.

The Supreme Court reversed the Ninth Circuit and held that runoff from logging roads is not subject to NPDES permits.  The Court found that EPA was within its authority in finding that only discharges directly related to operations of an industrial plant or process were subject to NPDES permitting.  The Court held that it was reasonable for EPA to conclude that runoff from the logging roads was not industrial activity, but rather the harvesting of raw materials, which would not require a permit.  The Court recognized that, as a general rule, it must defer to an agency’s interpretation of its own regulations unless that interpretation is plainly inconsistent.  The Court further recognized that EPA was given broad authority to work with state and local officials to address pollution through the development of state specific best management practices like the ones already implemented in Oregon.

Interestingly, Justice Antonin Scalia, who concurred with the majority on jurisdictional issues, disagreed on the substantive issue of CWA permitting.  He said it was wrong for the Court to give deference to EPA’s interpretation of its rules when the fairest reading of those rules requires a different outcome.  To Justice Scalia, the regulations require permitting because the runoff from the logging roads qualifies as a point source discharge associated with industrial activity.

What does this decision mean for the timber industry going forward?  Well, certainly the industry won an important battle, but it is likely to be one of many in a war that will continue.  The NEDC has announced it will take these fights to the EPA, which appears to have the decision making authority going forward.  Look for the environmental groups to put increasing pressure on EPA and state forestry agencies as they try to do what they were not able to do through the courts, i.e., get new regulations in place and further tighten those that already exist.