Kitlutsisti v. Arco Alaska, Inc.

• Decision Date: 24 July 1984
• Docket Number: No. A82-254 CIV.,A82-254 CIV.
• Citation: 592 F. Supp. 832
• Parties: Nunam KITLUTSISTI, an Alaskan non-profit corporation; Yukon-Kuskokwim Coastal Resource Service Area Board; Trustees for Alaska, an Alaskan non-profit corporation, Plaintiffs, v. ARCO ALASKA, INC., a Delaware corporation; Arco Exploration Company, a Delaware corporation; Atlantic Richfield Company, a Pennsylvania corporation; Ernesta Barnes, Regional Administrator of the Environmental Protection Agency; and William Ruckelshaus, Administrator of the Environmental Protection Agency, Defendants, Exxon Corporation, Intervenor-Defendant.
• Court: U.S. District Court — District of Alaska

592 F. Supp. 832

Nunam KITLUTSISTI, an Alaskan non-profit corporation; Yukon-Kuskokwim Coastal Resource Service Area Board; Trustees for Alaska, an Alaskan non-profit corporation, Plaintiffs, v. ARCO ALASKA, INC., a Delaware corporation; Arco Exploration Company, a Delaware corporation; Atlantic Richfield Company, a Pennsylvania corporation; Ernesta Barnes, Regional Administrator of the Environmental Protection Agency; and William Ruckelshaus, Administrator of the Environmental Protection Agency, Defendants Exxon Corporation, Intervenor-Defendant.

No. A82-254 CIV.

United States District Court, D. Alaska.

July 24, 1984.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Jeffrey M. Eustis and Eric Smith, Anchorage, Alaska, for Trustees for Alaska.

Michael Spaan, U.S. Atty., Anchorage, Alaska, Laura L. Davis, Asst. Atty. Gen., Juneau, Alaska, Carl J.D. Bauman, Hughes, Thorsness, Gantz, Powell & Brundin, Thomas Meacham, Burr, Pease & Kurtz, Anchorage, Alaska, for defendants.

MEMORANDUM AND ORDER

VON DER HEYDT, Chief Judge.

THIS CAUSE comes before the court on a number of pending motions, including plaintiffs' motion for a preliminary injunction and this court's order to show cause. In that show cause order the court requested the parties address the change in the factual situation that had occurred since the filing of plaintiffs' original motion for preliminary injunction.

I. Procedural Background

Plaintiffs in this case are three public interest organizations. Plaintiff Nunam Kitlutsisti (a Yupik term meaning "Protectors of the Land") is a non-profit Alaska Native environmental organization formed to promote the health, safety and quality of life of its members, some of whom reside along the southern shore of Norton Sound. Plaintiff Cenaliulriit is the coastal resource service area board for the Yukon-Kuskokwim River delta region, part of which borders on Norton Sound. See Alaska Stat. ch. 46.40. Plaintiff Trustees for Alaska is an Alaskan non-profit environmental organization. Trustees for Alaska has members who use Norton Sound for recreation, wildlife observation, livelihood, and research.

Plaintiffs filed this action against Atlantic Richfield Co. (ARCO) in July 1982 under the citizen suit provisions of the Federal Water Pollution Control Act of 1972 (FWPCA), 33 U.S.C. § 1365. The complaint sought to enjoin ARCO from drilling an offshore test well in Norton Sound for the reason that the Environmental Protection Agency (EPA) had not issued ARCO a NPDES permit for the drilling. Under the FWPCA, all discharge of pollutants into the nation's waters from point sources is illegal unless the discharger has a National Pollutant Discharge Elimination System (NPDES) permit. See 33 U.S.C. §§ 1311(a), 1342. The drilling of offshore wells involves the discharge of a large amount of pollutants into the water, including potentially toxic drilling muds used to lubricate the well shaft and drill bit. Therefore, offshore drilling operations require a NPDES permit to discharge pollutants.

ARCO admitted drilling the well without a NPDES permit. It responded, however, that it had applied for a permit but that the EPA refused to process the application, based on internal operating policies, and that EPA instead has issued a "letter of non-objection." This letter assured ARCO that if it would meet certain minimum discharge guidelines, EPA would forego prosecution. ARCO thus argued that EPA was a necessary party under Rule 19 for the reason that plaintiffs' challenge in fact was not to ARCO's drilling but to EPA's operating policies. The court granted ARCO's motion for joinder and ordered plaintiffs to join EPA as a defendant.¹

Plaintiffs filed a motion for preliminary injunction July 30, 1982 to enjoin further drilling in Norton Sound. This motion was not acted on prior to the cessation of drilling in September 1982. The motion subsequently was consolidated by the court with a motion for trial on the merits and is still pending, together with motions to dismiss filed by EPA and ARCO and various other motions. Prior to acting on these motions the court requested ARCO and EPA to inform it of the current status of drilling in Norton Sound. The responses of the parties indicated to the court the possibility that ARCO again would be drilling without a valid NPDES permit. The court therefore ordered defendants to show cause why drilling should not be enjoined in order to update briefing. After a hearing on the issue, the court on June 28, 1984 entered an order finding a NPDES violation and ordering certain relief. This memorandum explains the court's legal reasoning and addresses other outstanding motions.

II. Factual Background

The material facts in this case are undisputed and accordingly all motions are ripe for decision. ARCO first applied for a NPDES permit to discharge drilling muds in Norton Sound March 2, 1981. EPA responded by letters dated May 8, 1981 and May 29, 1981. See Ex. "A", pp. 1 & 2, Federal Defendants' Answer to First Amended Complaint (Docket # 47). In one letter, the EPA stated:

We have determined that, for administrative reasons, this Agency will not issue NPDES permits for your proposed discharges at this time. This action should not be construed as either an approval or denial of your requested authorization to discharge.

In a second letter, the EPA further stated:

Due to budgetary restraints, EPA is unable to issue your facility an NPDES permit during the time you plan on conducting the C.O.S.T. well drilling.

... If you commence discharge before an NPDES permit is issued, EPA will exercise its discretion not to prosecute ARCO for the discharge of waste water ... as long as the discharges comply with the requirements listed on Attachment A.

This promise of non-prosecution was reaffirmed in a letter to ARCO dated September 30, 1981.

ARCO started drilling in June 1982. Plaintiffs had previously notified ARCO, in a letter dated May 5, 1982, that discharges from ARCO's drilling would violate the FWPCA unless ARCO first obtained a NPDES permit. This letter was also forwarded to the EPA and State of Alaska, in compliance with the citizen suit requirement of 33 U.S.C. § 1365(b).

On June 7, 1982, the EPA issued a notice to ARCO labelled "Findings of Violation and Compliance Order." This order stated:

The application for the drilling of the C.O.S.T. well in Lease Sale 57 was received during a period of time when the NPDES permitting group in Region 10 was operating under an EPA Headquarters directive that said in effect that due to the limited resources of the Agency "major" permits or applications would be given priority in the NPDES permit issuance/reissuance process.

Application of the Headquarters directive (which included a rating criteria for classification of permits as major or minor) determined that ARCO Alaska's application for drilling operations in Norton Sound, Lease Sale 57, should be considered a "minor" application. Due to other Agency priorities, no minor NPDES permits were issued by Region 10 during the pendency of ARCO's application.

....

For the time period beginning on June 3, 1982 and ending on November 1, 1982, the Respondent shall not discharge any pollutant into the waters of the United States, which includes Norton Sound, except in strict compliance with those terms and conditions set out in that document marked as attachment A which is attached hereto and made a part hereof by reference.

This order, issued under the EPA's enforcement authority contained in 33 U.S.C. § 1319(a)(3), applied restrictions to ARCO's drilling similar to those that would have been contained in a NPDES permit. However, this "short form" permit process allowed EPA to avoid the public hearing and other procedural requirements normally associated with permit issuance. See 40 C.F.R. part 124 (1983). Drilling continued until September 19, 1982.

In December 1983, the EPA issued a general permit for all exploratory drilling in Norton Sound. See Issuance of Final NPDES Permits, 48 Fed.Reg. 54881 (Dec. 7, 1983). This general permit, by its own terms, expired June 30, 1984. The reason for the quick expiration is that the general permit reflected "best practicable control technology" (BPT) requirements. See 33 U.S.C. § 1311(b)(1)(A). All permits effective after July 1, 1984 are required by § 1311(b)(2) to contain effluent limitations representing "best available technology economically achievable" (BAT). Thus, in order to comply with the FWPCA, EPA set a June 30 expiration date for the general permit.

At that time, in response to comments received, the EPA stated that no extension of the general permit would be possible:

Comment: EPA should develop a simple mechanism for reissuing the permits after or extending the permits beyond the June 30, 1984, expiration date mandated by section 301(b)(2) the Clean Water Act.

Response: At present we have no simple legal mechanisms for reissuing or extending these permits since they will have to be modified to reflect guidelines for best available technology economically achievable (BAT) after June 30, 1984. BAT guidelines are scheduled to be proposed in late 1983 or early 1984. Prior to the permit expiration date, we plan to evaluate the proposed regulations and to reissue these permits, incorporating our best professional judgment for the application of BAT requirements.

Comment: Will the permits be continued under the authority of Section 9(b) of the Administrative Procedure Act (APA), 5 U.S.C. 558(c) if EPA is unable to formally renew, extend or reissue these permits by June 30, 1984?

Response: Individual permits can be continued under the authority of APA. However, the provisions of this Act do not authorize EPA to continue general NPDES permits in a similar manner. The general permit does not require the permittee to submit an NPDES application, which is needed if the permit is to be continued under the APA.

48 Fed.Reg. at 54884. Nevertheless, EPA...