e-Bulletin: Supreme Court Holds Federal Water Standards Must Be Imposed Regardless Of Cost

Last week, the California Supreme Court handed cities a mixed victory in the fight to determine who bears the costs of complying with California's stringent water quality standards.  On one hand, the Court rejected contentions from the municipalities that Regional Water Quality Control Boards should take into account “economic considerations,” such as the costs of compliance, when setting wastewater discharge requirements under the federal Clean Water Act.  However, the Court agreed with cities that, to the extent that the Regional Boards impose waste discharge requirements that are more stringent than those required by the federal law, economic considerations must be taken into account. 

At issue in the case are three wastewater treatment plants owned by the cities of Burbank and Los Angeles.  All the plants discharge water into the Los Angeles River, which is considered a "navigable water of the United States" under the federal Clean Water Act ("CWA") even though the river now exists only as a concrete-lined flood control channel.  In 1998, the National Pollution Discharge Elimination System ("NPDES") permits issued by the Los Angeles Regional Water Quality Control Board to the three facilities contained strict pollution limitations for more than 30 pollutants.  Los Angeles and Burbank contended that the economic costs of complying with these wastewater limitations would far exceed the benefits.  Los Angeles estimated that its costs would exceed $50 million annually, or approximately 40% of its sewer system budget.  For Burbank, the estimated $9 million added annual cost equaled nearly its entire wastewater treatment budget.

The Supreme Court noted that when California’s Porter-Cologne Water Quality Control Act was enacted in 1969, the law directed the Regional Boards to consider the cost of compliance when setting wastewater discharge requirements.  However, when Congress passed the CWA in 1972, the California Legislature adopted an additional statute that forbade the consideration of economic factors if they would cause a dilution in the federal standards.  Thus, to the extent that the Los Angeles Regional Board was imposing wastewater discharge requirements that were within federal limitations, the Supreme Court held that the Regional Board proceeded correctly when it refused to consider the cost of compliance.  However, the Supreme Court also held that to the extent wastewater discharge requirements exceed federal standards, then the cost of compliance must be considered as required by California law.  Accordingly, the Supreme Court remanded the case back to the trial court in Los Angeles to determine whether the specific restrictions imposed on Los Angeles and Burbank exceeded CWA requirements.