On March 24, 2015, the New York Court of Appeals heard oral argument on a case challenging how municipal separate storm sewer systems (known as MS4s) are regulated by the New York State Department of Environmental Conservation (NYSDEC). The Court of Appeals will decide whether the federal Clean Water Act (CWA) is violated by the NYSDEC’s issuance of a general permit governing discharges from MS4s.  If the Court of Appeals affirms the appellate court decision, (Natural Resources Defense Council, Inc. v NYSDEC, 120 AD3d 1235 [2d Dept 2014]), small municipalities throughout New York and the NYSDEC will breathe a sigh of relief.  On the other hand, if the Court of Appeals reverses, and agrees with the trial court, (Natural Resources Defense Council, Inc. v NYSDEC, 35 Misc3d 652 [Sup. Ct. Westchester Co. 2012]), the impact to the NYSDEC, local governments and taxpayers will be significant.

The CWA  prohibits discharges of water pollution from point sources into surface waters except in compliance with either a national pollutant discharge elimination system (NPDES) permit, issued by the U.S. Environmental Protection Agency (USEPA) or a state pollutant discharge elimination system (SPDES) permit issued by a USEPA-authorized state agency.  The NYSDEC is an USEPA-authorized state agency.

There are two types of NPDES/SPDES permits authorized by the CWA, individual permits (facility specific) and general permits (covering regional or categories of facilities).   The NYSDEC issued a general permit for storm water discharges from certain MS4s (the “General Permit”).  Approximately 500 small municipalities are covered by this General Permit.

The Natural Resources Defense Council, Inc., (NRDC) and others sued the NYSDEC contending that the General Permit violates the CWA because it fails to ensure that these small municipalities reduce their pollutant discharges to the “maximum extent practicable.”  The trial court agreed with the NRDC.  The Second Department reversed. In 2013, it found that the General Permit did not violate the CWA.  In 2014, on re-argument, the Appellate Division essentially confirmed its 2013 ruling.

The Second Department determined that the term “maximum extent practicable” was deliberately left undefined by the USEPA to allow maximum flexibility in MS4 permitting on a location-by-location basis.  The appellate court noted that the USEPA outlined various minimum control measures for small MS4s to achieve the maximum extent practicable standard. It found that the General Permit was consistent with the USEPA general permit criteria and was designed to meet the maximum extent practicable standard as it required covered municipalities to develop, implement, and enforce a storm water management plan aimed at reducing the discharge of pollutants.  The plan had to identify and describe the selected best management practices and include measurable goals for each such practice.

The Second Department rejected the NRDC’s argument that the General Permit created a self-regulatory system that failed to ensure compliance with the CWA.  In the appellate court’s view, the following factors ensured compliance with the CWA: (1) the General Permit required a municipality to submit a complete and accurate notice of intent; (2) the NYSDEC could refuse to accept a notice of intent that failed to comply with the maximum extent practicable standard; (3)  a public comment period of at least 28 days needed to be provided; and (4) the NYSDEC had the legal  authority to enforce compliance with the CWA if it determined that an MS4 failed to implement its storm water management plan or otherwise failed to comply with the requirements of the General Permit.

The New York Court of Appeals should issue its decision in the next few months.