Michigan Farm Bureau v. Dep't of Envtl. Quality

• Decision Date: 29 March 2011
• Docket Number: Docket No. 290323.
• Citation: 807 N.W.2d 866,292 Mich.App. 106
• Parties: MICHIGAN FARM BUREAU v. DEPARTMENT OF ENVIRONMENTAL QUALITY.
• Court: Court of Appeal of Michigan — District of US

292 Mich.App. 106

807 N.W.2d 866

MICHIGAN FARM BUREAU

v.DEPARTMENT OF ENVIRONMENTAL QUALITY.

Docket No. 290323.

Court of Appeals of Michigan.

Submitted July 7, 2010, at Grand Rapids.Decided March 29, 2011, at 9:00 a.m.

Varnum LLP (by Richard A. Samdal and Aaron M. Phelps), Grand Rapids, for plaintiffs.

Bill Schuette, Attorney General, John J. Bursch, Solicitor General, and Alan F. Hoffman, Assistant Attorney General, for defendant.

Before: HOEKSTRA, P.J., and JANSEN and BECKERING, JJ.

JANSEN, J.

Plaintiffs commenced this declaratory judgment action in the circuit court to challenge an administrative rule promulgated by defendant Department of Environmental Quality (DEQ). The circuit court determined that the challenged rule fell within the scope of the DEQ's statutory rulemaking authority, that it was rationally related to the DEQ's statutory mandate to protect Michigan's waters from pollution, and that it was neither arbitrary nor capricious as a matter of law. The court accordingly granted summary disposition in favor of the DEQ and dismissed plaintiffs' claims. Plaintiffs now appeal as of right, arguing that the challenged rule exceeds the scope of the DEQ's statutory rulemaking authority, that the rule violates the intent of the Legislature, that the rule is arbitrary and capricious, and that the circuit court therefore erred by granting summary disposition in favor of the DEQ. For the reasons set forth in this opinion, we affirm.

I. BASIC FACTS AND PROCEDURAL HISTORY

A. STATUTORY BACKGROUND

The Federal Water Pollution Control Act, commonly known as the Clean Water Act (CWA), 33 U.S.C. § 1251 et seq., “is a comprehensive water quality statute designed to ‘restore and maintain the chemical, physical, and biological integrity of the Nation's waters.’ ” PUD No. 1 of Jefferson Co. v. Washington Dep't of Ecology, 511 U.S. 700, 704, 114 S.Ct. 1900, 128 L.Ed.2d 716 (1994), quoting 33 U.S.C. § 1251(a). By enacting the CWA, Congress sought to eliminate “the discharge of pollutants into the [nation's] navigable waters” and to attain “an interim goal of water quality which provides for the protection and propagation of fish, shellfish, and wildlife....” 33 U.S.C. § 1251(a)(1) and (2). “Toward this end, the [CWA] provides for two sets of water quality measures.” Arkansas v. Oklahoma, 503 U.S. 91, 101, 112 S.Ct. 1046, 117 L.Ed.2d 239 (1992). These two types of water quality measures are known as “effluent limitations,” 33 U.S.C. § 1311, and “water quality standards,” 33 U.S.C. § 1313.

“ ‘Effluent limitations' are promulgated by the EPA and restrict the quantities, rates, and concentrations of specified substances which are discharged from point sources.” ¹ Arkansas, 503 U.S. at 101, 112 S.Ct. 1046. The “primary means for enforcing” these effluent limitations is the National Pollutant Discharge Elimination System (NPDES). Id. In particular, “[t]he [CWA] prohibits the ‘discharge of any pollutant’ into ‘navigable waters' from any ‘point source,’ except when authorized by a permit issued under the [NPDES].” Sierra Club Mackinac Chapter v. Dep't of Environmental Quality, 277 Mich.App. 531, 534, 747 N.W.2d 321 (2008), quoting 33 U.S.C. § 1311(a), 33 U.S.C. § 1342, and 33 U.S.C. § 1362(12); see also Arkansas, 503 U.S. at 102, 112 S.Ct. 1046. “Section 402 [of the CWA] establishes the NPDES permitting regime, and describes two types of permitting systems: state permit programs that must satisfy federal requirements and be approved by the EPA, and a federal program administered by the EPA.” Arkansas, 503 U.S. at 102, 112 S.Ct. 1046.

“Before a state desiring to administer its own program can do so, the [EPA's] approval is required and the state must demonstrate, among other things, adequate authority to abate violations through civil or criminal penalties or other means of enforcement.” Ringbolt Farms Homeowners Ass'n v. Town of Hull, 714 F.Supp. 1246, 1253 (D.Mass., 1989). Once the EPA approves a state's request to administer its own NPDES program, that state's NPDES program is administered pursuant to state law rather than federal law. Id. In other words, the EPA's authorization of a state-administered NPDES program is “ ‘not a delegation of Federal authority,’ ” but instead allows the state-administered program to function “ ‘in lieu of the Federal program.’ ” Id. (citation omitted); see also Sierra Club, 277 Mich.App. at 556, 747 N.W.2d 321 (Zahra, J., dissenting). A state that administers its own NPDES program may adopt discharge standards and effluent limitations that are more stringent than the federal standards and limitations. 40 C.F.R. § 123.1(i)(1); West Virginia Highlands Conservancy, Inc. v. Huffman, 625 F.3d 159, 162 (C.A.4, 2010); see also 40 C.F.R. § 123.25(a). However, a state's discharge standards and effluent limitations may not be less stringent than the federal standards and limitations. 33 U.S.C. § 1370.

In 1973, the EPA granted Michigan the authority to administer its own NPDES program. Sierra Club, 277 Mich.App. at 535, 747 N.W.2d 321; see also United States v. Bay–Houston Towing Co., Inc., 197 F.Supp.2d 788, 801 (E.D.Mich., 2002). Part 31 of Michigan's Natural Resources and Environmental Protection Act (NREPA), MCL § 324.3101 et seq. , governs the protection of water resources in this state. Under Part 31 of the NREPA, “ the DEQ is responsible for issuing NPDES permits in Michigan and ensuring that those permits comply with applicable federal law and regulations.” Sierra Club, 277 Mich.App. at 535–536, 747 N.W.2d 321.

B. THE FEDERAL CAFO RULE

As explained previously, the CWA requires an individual to seek and obtain an NPDES permit before he or she may discharge pollutants into the nation's navigable waters from any “point source.” Id. at 534, 747 N.W.2d 321; see also Arkansas, 503 U.S. at 102, 112 S.Ct. 1046. The CWA defines the term “point source” as “any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged.” 33 U.S.C. § 1362(14) (emphasis added). Concentrated animal feeding operations (CAFOs) are “large-scale industrial operations that raise extraordinary numbers of livestock.” Waterkeeper Alliance, Inc. v. Environmental Protection Agency, 399 F.3d 486, 492 (C.A.2, 2005). The federal regulations promulgated under the CWA define and categorize CAFOs depending on the number of animals that they stable or confine.² Sierra Club, 277 Mich.App. at 535, 747 N.W.2d 321; see also 40 C.F.R. § 122.23(b).

The EPA first promulgated regulations for CAFOs in the 1970s. Waterkeeper, 399 F.3d at 494. These initial regulations, “very generally speaking, defined the types of animal feeding operations that qualify as CAFOs, set forth various NPDES permit requirements, and established effluent limitation guidelines for CAFOs.” Id. Thereafter, in 2001, the EPA “proposed to ‘revise and update’ the first set of CAFO regulations.” Id. (citation omitted). The EPA published a proposed new rule for CAFOs and received numerous public comments. Id. at 494–495. Ultimately, in 2003, the EPA promulgated its final CAFO rule (the 2003 Federal CAFO Rule), which was codified within 40 C.F.R. parts 9, 122, 123, and 412. National Pollutant Discharge Elimination System Permit Regulation and Effluent Limitation Guidelines and Standards for Concentrated Animal Feeding Operations (CAFOs), 68 Fed Reg 7176 (February 12, 2003); see also Waterkeeper, 399 F.3d at 495.

Among other things, the 2003 Federal CAFO Rule as originally promulgated provided that all CAFO owners or operators “must either apply for an individual NPDES permit or submit a notice of intent for coverage under an NPDES general permit.” 40 C.F.R. § 122.23(d)(1); see also Waterkeeper, 399 F.3d at 495. The federal rule also contained an exception to this requirement for “CAFOs that have successfully demonstrated no potential to discharge ....” NPDES Permit Regulation and Effluent Guidelines and Standards for CAFOs, 68 Fed Reg at 7182 (emphasis added); see also former 40 C.F.R. § 122.23(d)(2).

C. THE MICHIGAN CAFO RULE

In light of the EPA's promulgation of the 2003 Federal CAFO Rule, “Michigan promulgated its own administrative rules specific to the NPDES for CAFOs, which the EPA reviewed.” Sierra Club, 277 Mich.App. at 536, 747 N.W.2d 321 (footnote omitted). Michigan's CAFO regulations are codified within Mich.Admin. Code, R 323.2102, R 323.2103, R 323.2104, and R 323.2196. Sierra Club, 277 Mich.App. at 536 n. 18, 747 N.W.2d 321. Like the 2003 Federal CAFO Rule as originally promulgated, the Michigan regulations provide that “[a]ll CAFO owners or operators shall apply either for an individual NPDES permit, or a certificate of coverage under an NPDES general permit[.]” Rule 2196(1)(b); see also Sierra Club, 277 Mich.App. at 536–537, 747 N.W.2d 321. Also like the 2003 Federal CAFO Rule as originally promulgated, the Michigan regulations provide an exception to this requirement for CAFO owners and operators who have “received a determination from the department, made after providing notice and opportunity for public comment, that the CAFO has ‘no potential to discharge[.]’ ” ³ Rule 2196(1)(b); see also Sierra Club, 277 Mich.App. at 536–537, 747 N.W.2d 321.

D. THE WATERKEEPER DECISION

In 2003 and 2004, various plaintiffs sought review of the 2003 Federal CAFO Rule in the United States Court of Appeals for the Second Circuit.⁴ See Waterkeeper, 399 F.3d at 490, 497. Among these plaintiffs was a group of farming organizations that challenged the permitting scheme established by the federal rule. In particular, these plaintiffs argued that the EPA had exceeded its statutory jurisdiction by requiring all CAFOs, including those that were not actually discharging pollutants into the navigable waters, “to either apply for NPDES permits...