State Supreme Court decision gives Ecology discretion to regulate nutrient pollution
September 15, 2024
The Washington State Supreme Court (WSSC) issued a unanimous opinion that gives the state Department of Ecology discretion to regulate nutrient pollution without going through rulemaking. The decision clarifies existing case law on directives of “general applicability” under the Administrative Procedure Act (APA).
Earlier this year, BIAW filed an amicus brief supporting the City of Tacoma and others to help reduce costs for home builders and homeowners. The groups challenged actions taken by the state Dept. of Ecology as improper rulemaking. In its amicus, BIAW advocated that agency actions and rules should follow all the necessary steps under the APA to provide clarity to the private entities that operate under them.
A commitment to reducing nitrogen output
In 2019, Ecology denied an environmental advocacy group’s request to create a rule designating wastewater tertiary treatment as a precondition for the issuance and re-issuance of NPDES permits.
Considering that installing nitrogen removal systems in WWTPs can cost hundreds of thousands of dollars, Ecology denied the rulemaking request. However, in its denial letter, Ecology expressed several commitments to reducing nitrogen output by WWTPs.
In their 2021 lawsuit, petitioners argued that Ecology lacked the authority to impose tertiary treatment requirements at wastewater treatment plants (WWTP) without following the Administrative Procedure Act (APA). They also asserted that the new directive would be difficult and expensive to implement, resulting in higher costs for homeowners in Washington.
Both the lower court and the Division III Court of Appeals ruled in their favor. Ecology appealed the case to the Supreme Court.
Discretion to regulate, not rulemaking
In City of Tacoma v. Dept. of Ecology, the WSSC reversed the Court of Appeals. The WSSC held that Ecology’s commitments to reducing nitrogen discharge from wastewater treatment plants (WWTPs) did not rise to the level of APA rulemaking.
The WSSC ruled Ecology staff had discretion to take a case-by-case approach to issuing National Pollution Discharge Elimination System (NPDES) permits based on the permit holder’s operations. Therefore, the commitments in Ecology’s letter were not directives of “general applicability.” The Court held that general applicability would require uniform application of the rule.
De facto building moratorium?
Whether Ecology intends to follow those commitments goes to the heart of the issue in this case. While it is beneficial that Ecology refused to create a rule mandating tertiary treatment in WWTPs, its arbitrary implementation of the denial letter “rules” could nevertheless require system upgrades costing anywhere from $319 million to $1.314 billion.
If cities are allowed to rescind NPDES permits if and when Ecology decides to limit treatment capacity by capping nitrogen discharges, development will halt. Nitrogen removal system upgrades will also substantially increase sewer rates, making homeownership even more expensive.
“While our industry benefits from clarity in the APA rulemaking process, Ecology’s discretion to regulate nutrient pollution leaves home builders and homeowners susceptible to financial hardship,” said Ashli Penner, BIAW General Counsel.
BIAW is committed to affordable housing and will continue to monitor WWTPs and the impact that permitting may have on affordable homes.