1. NEDC v. Brown Responding to the 9 th Circuit’s Ruling Presentation for Society of American Foresters October 29, 2010 ● Albuquerque, New Mexico ● SAF National Convention

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3. 3 Clean Water Act & Logging Roads The Clean Water Act (CWA) requires a National Pollution Discharge Elimination (NPDES) permit for “point source” discharges of pollutants to navigable waters. Non-point source pollution is not subject to the same permitting requirements and generally is addressed through other CWA programs (e.g. TMDLs). There are statutory exemptions from the NPDES permit requirement, including for some agricultural operations, but not for forest management activities. However, by regulation EPA has long exempted silvicultural activities from the NPDES permit requirement of the CWA.

4. Stoel Rives Forest Industries Practice 4 NEDC v. Brown NEDC sued : – Marvin Brown (the Oregon State Forester); – all the members of the Oregon Board of Forestry; and – Hampton Affiliates, Stimson Lumber, Georgia-Pacific and Swanson Group—companies with state logging contracts that hauled logs on the roads in question. NEDC alleged: – NPDES permit required for stormwater runoff from forest roads. Additional parties: – OFIC and AF&PA intervened.

5. Stoel Rives Forest Industries Practice 5 Alleged Facts NEDC presented photographs allegedly showing turbid runoff from ditches and culverts from the Trask River Road and Sam Downs Road in the Tillamook State Forest of Oregon. NEDC alleged the state owned the roads (although one is owned by the county). NEDC alleged that the 4 companies haul logs on the road, thereby “grinding up the road surface and creat[ing] much of the sediment and other pollutants delivered to rivers and streams.”

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7. 7 Plaintiff’s Legal Arguments Discharges from ditches and culverts associated with the roads are point source discharges. The silviculture exemption in EPA’s rules is invalid. Hauling logs is an “industrial activity” within the meaning of § 402(p) of the CWA and, therefore, is subject to stormwater permitting requirements.

8. Stoel Rives Forest Industries Practice 8 Silvicultural Rule “Silvicultural point source means any discernible, confined and discrete conveyance related to rock crushing, gravel washing, log sorting, or log storage facilities which are operated in connection with silvicultural activities and from which pollutants are discharged into waters of the United States. The term does not include non-point source silvicultural activities such as nursery operations, site preparation, reforestation and subsequent cultural treatment, thinning, prescribed burning, pest and fire control, harvesting operations, surface drainage, or road construction and maintenance from which there is natural runoff. However, some of these activities (such as stream crossing for roads) may involve point source discharges of dredged or fill material which may require a CWA section 404 permit.” 40 CFR 1222.27(b).

9. Stoel Rives Forest Industries Practice 9 Silvicultural Rule Defendants argue Silvicultural Rule clearly applies. Plaintiffs argue that exemption only applies to “non-point sources” and that EPA cannot undermine the CWA by exempting point sources (citing EPIC v. PALCO, No. C01- 2821-MHP (ND Cal. Oct. 14, 2003)). Defendants argue that EPA has broad authority to interpret the term “point source” in the Silvicultural Rule. Both sides cite the 9 th Circuit’s Forsgren decision for support (League of Wilderness Defenders v. Forsgren, 309 F3d 1181 (9 th Cir. 2002)).

10. Stoel Rives Forest Industries Practice 10 Clean Water Act Section 402(p) Two-phase regulatory program for stormwater. Phase I required permits for stormwater from: – Industrial activity; – Municipal separate storm sewer serving population >100,000. Phase II required EPA to study and identify additional sources as necessary to mitigate impacts on water quality. EPA identified and required permits from: – Smaller municipal separate storm sewers; – Construction sites >5 acres.

11. Stoel Rives Forest Industries Practice 11 EDC v. EPA, 344 F3d 832 (9 th Cir. 2003) EDC challenged EPA’s phase II rules, including an argument that EPA improperly failed to include forest roads. On procedural grounds, the court remanded the rule to EPA to reconsider, including reconsideration of whether forest roads should require phase II stormwater permits. In this case, the court and EPA clearly recognized that forest roads are not subject to phase I permitting requirements as an industrial activity.

12. Stoel Rives Forest Industries Practice 12 District Court’s Decision Granted motion to dismiss in favor of defendants. Decision based entirely on interpretation of Silvicultural Rule. – Relied heavily on Forsgren. – Concluded that Forsgren rejected application of Silvicultural Rule because aerial spraying of pesticides is not natural runoff. – Forsgren did not invalidate the Silvicultural Rule or narrowly apply it to nonpoint sources (which don’t need an exemption). Court did not reach the section 402(p) arguments.

13. Stoel Rives Forest Industries Practice 13 Ninth Circuit Panel Fletcher, Breyer and Fisher – Fletcher, author of NEA v. EPA overturning EPA exclusion of ballast water discharges from NPDES permitting – Breyer, district court judge, Northern District of California, home of Judge Patel, who authored EPIC v. Pacific Lumber Co.

14. Stoel Rives Forest Industries Practice 14 Ninth Circuit’s Opinion NEDC v. Brown, 2010 WL 3222105 (9 th Cir. Aug. 17, 2010) Reversed District Court Held: – Silvicultural Rule cannot exclude logging road discharges from NPDES permitting. – Logging road discharges are industrial stormwater discharges subject to EPA Phase I NPDES permitting.

15. Stoel Rives Forest Industries Practice 15 Silvicultural Rule Logging road stormwater discharges fall squarely within the statutory definition of a point source. – Congress did not empower EPA to redefine what constitutes a point source. – Congress clearly wanted to regulate all point-source discharges. Result: The Silvicultural Rule does not exempt stormwater runoff from logging roads from NPDES permitting, and has no continuing effect in 9 th Circuit.

16. Stoel Rives Forest Industries Practice 16 Industrial Discharge The Panel acknowledged: – EPA’s regulatory definition of discharges associated with industrial activity “purports to exclude forest road discharges” – EPA plainly intended to exclude such discharges But...

17. Stoel Rives Forest Industries Practice 17 Industrial Discharge The Panel found EPA could not exclude such discharges because: – EPA conceded that logging is “industrial” when it found that “industrial facilities” include “Lumber and Wood Products” facilities under SIC 24. – The discharges otherwise fit in the regulatory definition of industrial discharges.

18. Stoel Rives Forest Industries Practice 18 Industrial Discharge In reaching this conclusion, the Panel: – Ignored EPA’s plain explanation that its inclusion of SIC 24 was not intended to encompass logging activities covered by the Silvicultural Rule. – Ignored the fact that forest road discharges do not fit the definition of industrial discharges. – Ignored the court’s own ruling in EDC v. EPA.

19. Stoel Rives Forest Industries Practice 19 Implications Threshold issues: – What roads require permits? What construction features actually constitute point sources? What attributes define a logging road and distinguish from a road not associated with industrial activities? – Who needs the permit? The road owner? Holders of timber contracts with road maintenance requirements? Anyone who uses the road? – General permit or source-specific permit?

20. Stoel Rives Forest Industries Practice 20 Implications Sweeping/uncertain permitting requirements – Enormous number of roads and culverts potentially subject to permitting – No established permitting system – No clear permitting criteria, but... May have to meet effluent limitations (water quality standards) May require monitoring

21. Stoel Rives Forest Industries Practice 21 Implications Legal uncertainty and lawsuits – Impact on federal and state timber sales Delay and/or lawsuits to enjoin timber sales Possible revisions to timber sale agreements – Impact on private timber harvesting Lawsuits to enjoin harvesting and/or hauling Effects not only on private roads, but on county roads that could be considered “logging roads”

22. Stoel Rives Forest Industries Practice 22 Response First step – Petition for rehearing en banc Stay of the mandate pending ruling. Rehearing statistically unlikely. Second step – Petition for certiorari to the U.S. Supreme Court Seek a further stay of the Ninth Circuit ruling. Chances to prevail are best here.

23. Stoel Rives Forest Industries Practice 23 Current Status Petition for en banc review filed – Focus on the weaker aspect of the Panel’s ruling that forest road stormwater is an industrial discharge. – Focus on the sweeping implications and importance of the ruling. – Court has asked for responsive briefing from plaintiffs (good sign).

24. Stoel Rives Forest Industries Practice 24 What Else Are We Doing? Coordination with others – State has filed a petition for en banc review as well, focusing on similar arguments. – EPA was unwilling to file an amicus brief but made clear that its position has not changed. – And...

25. Stoel Rives Forest Industries Practice 25 Amicus Briefs Coordination with others – Amicus briefs filed Pacific Legal Foundation on behalf of industry groups County organizations Mountain States Legal Foundation American Forest Resource Council – Focus of these briefs is on showing the scope and importance of the court’s ruling

26. Stoel Rives Forest Industries Practice 26 What’s Next? Court will act – Either deny or grant petition for rehearing. – If granted, group of 11 judges will rehear the case. – If denied, petition for cert. in 90 days. Legislative solution – Statutory exemption for forest operations?

27. Thank You! Greg D. Corbin gdcorbin@stoel.com (503) 294-9632 October 29, 2010 ● Albuquerque, New Mexico ● SAF National Convention