The U.S. Environmental Protection Agency (“EPA”) recently announced a proposed settlement^[1] in two lawsuits filed in 2020 by Maryland, Virginia, Delaware, the District of Columbia, the Chesapeake Bay Foundation, and a number of environmental groups alleging the EPA is not doing enough to ensure Pennsylvania is reducing nutrient and sediment discharges from impacting the water quality in the Chesapeake Bay.

What You Need to Know:

• The U.S. Environmental Protection Agency (“EPA”) recently announced a proposed settlement in two lawsuits filed in 2020 by Maryland, Virginia, Delaware, the District of Columbia, the Chesapeake Bay Foundation, and a number of environmental groups alleging the EPA is not doing enough to ensure Pennsylvania is reducing nutrient and sediment discharges from impacting the water quality in the Chesapeake Bay.
• The proposed settlement calls for the EPA to increase its oversight and enforcement of Pennsylvania’s compliance with clean water obligations. 
• Assuming it is finalized, the settlement is likely to increase government enforcement activities at industrial sites, farms, and wastewater treatment operations in Pennsylvania. 
• Members of the public have until May 22, 2023 to comment on the proposed settlement.

The proposed settlement calls for the EPA to increase its oversight and enforcement of Pennsylvania’s compliance with clean water obligations. Assuming it is finalized, the settlement is likely to increase government enforcement activities at industrial sites, farms, and wastewater treatment operations in Pennsylvania. The proposed settlement was published in the Federal Register on April 21, 2023,^[2] triggering a 30-day public comment period. Following the close of comments, the EPA is required to work out the final details with the parties to the litigation.

By way of background, Section 117 of the Clean Water Act (“CWA”) encourages the jurisdictions in the Chesapeake Bay (the “Bay”) watershed – Pennsylvania, Maryland, Delaware, Virginia, West Virginia, New York, and Washington, D.C. (collectively, the “Bay states”) – to enter into agreements to limit pollutants entering into the Chesapeake Bay.^[3] In the late 2000s, the Bay states entered into a partnership and agreed to install by 2025 all practices and controls necessary to achieve the Bay’s dissolved oxygen, water clarity/submerged aquatic vegetation, and chlorophyll-a water quality standards.^[4] The EPA, through the CWA, is authorized to ensure each of the Bay states develop and implement a management plan, and to establish backstop measures to ensure compliance.^[5]

According to the U.S. Geological Survey, the Susquehanna River supplies 55 percent of the freshwater flowing into the Chesapeake Bay, and contributes 44 percent of the nitrogen load and 24 percent of the phosphorus load to the Bay.^[6] Maryland shined a spotlight on this issue in 2013 when it became clear that the Conowingo Dam, which lies near the intersection of the Susquehanna River and Chesapeake Bay, no longer served to block nitrogen, phosphorous, and sediments from Pennsylvania and would cause severe pollution of the Chesapeake Bay if not addressed.^[7] Although the operator of the Conowingo Dam agreed to take action regarding pollutants in the dam, the root cause of the problem – pollutants from the Susquehanna River – remains a key issue for Maryland, the Chesapeake Bay Foundation, and other environmental activists. 

The Pennsylvania Department of Environmental Protection has submitted several plans to the EPA in an effort to meet its agreed-upon clean water goals, but has thus far failed to produce a plan acceptable to the EPA. According to the EPA and environmental groups, Pennsylvania’s most recent plan fails to meet its nitrogen target^[8] or account for realistic funding.^[9] As a result, several of the Bay states and a collection of environmental groups sued the EPA in 2020, alleging that the EPA failed in its duties to oversee and enforce the Bay states’ agreement to reduce pollution. ^[10] The proposed settlement would resolve those claims. 

The proposed settlement includes:

1. Enhanced EPA oversight of Pennsylvania-issued National Pollutant Discharge Elimination System (“NPDES”) permits.^[11] NPDES permits limit discharges into regulated waterways and are required under wastewater and stormwater permitting regimes.^[12] 
2. Enhanced EPA compliance-assurance activities to assess the compliance of NPDES-permitted sources in the Pennsylvania counties with the highest nutrient and sediment loads to reduce. The Pennsylvania counties that have the most nutrient load to reduce are Lancaster and York Counties. Those that have the second most nutrient load to reduce are Franklin, Lebanon, Cumberland, Centre, and Bedford Counties.^[13]
3. EPA evaluation of “animal feeding operations”^[14] in the Pennsylvania counties listed above, in addition to EPA evaluation of stormwater discharges not currently subject to federal regulation within the Pennsylvania portion of the Chesapeake Bay watershed.^[15] The EPA will discuss with Pennsylvania the possibility of subjecting these sites to NPDES permitting. Should Pennsylvania fail to meet its reduction requirements, or should the EPA determine that certain stormwater discharges contribute to a violation of Bay water standards, the EPA may exercise its authority to designate sources or categories of discharges for NPDES permitting. 
4. EPA evaluation of funding vehicles under the CWA to assist priority areas in Pennsylvania counties that have the greatest potential to reduce nutrient discharges.^[16] The EPA will target funding for workshops for potential grant applicants about grant opportunities and technical assistance to grant applicants to increase their awareness of grant programs related to management practices that reduce water pollution. The EPA will also propose a grants workplan that would include Pennsylvania providing programmatic commitments and details regarding its progress towards its water pollution goals.
5. EPA evaluation of each state’s progress toward meeting the states’ water pollution goals for 2025.^[17]
6. Publishing the results of the EPA evaluation processes identified in the settlement on the EPA website.^[18]

This settlement would end the litigation against the EPA related to its oversight of the Bay states without prejudicing the plaintiffs’ right to resume their challenge if the EPA fails its obligations under the settlement agreement.^[19]

Whether the settlement is impactful is a function of both politics and enforcement. For example, in Maryland, both environmental activists and private industry argue that Maryland’s new general permit program for stormwater discharge provides the Maryland Department of the Environment with too much discretion to decide whether to enforce the program. As a result, both activists and industry leaders claim that the program is underenforced against favored entities, like local municipalities, but over-enforced against private industry, which is often the target of special interests. Both groups say they would benefit from clear rules to guide regulators. 

Therefore, this settlement will likely increase pressure on environmental regulators in the Chesapeake Bay watershed to “do” something. This will likely take the form of increased inspections and notices of violations under existing NPDES permits. Yet, because environmental enforcement regimes are highly imperfect and discretionary, they can be politically driven and lead to greater enforcement against private industry. Businesses would do well to review their wastewater and stormwater permits, as well as to review any locally-proposed general permits to determine whether the provisions match current practices or could be excessive or expensive. 

The thirty-day period in which the public can comment on the proposed settlement agreement ends on May 22, 2023. To submit a comment, visit here.  

[1] The proposed settlement agreement (“Settlement”) is available at https://www.regulations.gov/document/EPA-HQ-OGC-2023-0243-0002.

[2] See Federal Register, “Proposed Settlement Agreement, Clean Water Act and Administrative Procedure Claims, (Apr. 21, 2023), available at https://www.federalregister.gov/documents/2023/04/21/2023-08510/proposed-settlement-agreement-clean-water-act-and-administrative-procedure-act-claims.

[3] See generally 33 U.S.C. § 1267.

[4] Settlement at 1.

[5] 33 U.S.C. § 1267(g)(1); Settlement at 1.

[6] U.S. Geological Survey, “Pennsylvania and the Chesapeake Bay Watershed,” (Feb. 15, 2022), available at https://www.usgs.gov/centers/pennsylvania-water-science-center/science/pennsylvania-and-chesapeake-bay-watershed.

[7] See Mot. to Intervene of the Local Gov’t Members of the Clean Chesapeake Coalition (June 24, 2013), Project No.: P-405-106, Exelon Generation Company, LLC (U.S. Fed. Regulatory Comm’n).

[8] U.S. EPA, “EPA Evaluation of Pennsylvania’s Amended Phase III WIP,” (last updated Nov. 21, 2022), available at https://www.epa.gov/chesapeake-bay-tmdl/epa-evaluation-pennsylvanias-amended-phase-iii-wip.

[9] Chesapeake Bay Foundation, “Pennsylvania’s Watershed Implementation Plan,” available at https://www.cbf.org/how-we-save-the-bay/chesapeake-clean-water-blueprint/state-watershed-implementation-plans/pennsylvania/index.html (last visited Apr. 27, 2023).

[10] See Chesapeake Bay Foundation, Inc. et al. v. U.S. EPA et al., 1:20-cv-2529 (D.D.C.), and State of Maryland et al. v. Regan et al., 1:20-cv-2530 (D.D.C.).

[11] Settlement § III(2).

[12] See U.S. EPA, “NPDES Permit Basics,” (last updated Dec. 23, 2022), available at: https://www.epa.gov/npdes/npdes-permit-basics.

[13] Settlement § III(3).

[14] “Animal feeding operation” is defined as a lot or facility at which “(i) [a]nimals (other than aquatic animals) have been, are, or will be stabled or confined and fed or maintained for a total of 45 days or more in any 12-month period, and (ii) [c]rops, vegetation, forage growth, or post-harvest residues are not sustained in the normal growing season over any portion of the lot or facility.”  40 C.F.R. § 122.23(b).

[15] Settlement § III(4).

[16] Settlement § III(5).

[17] Settlement § III(1), (6).

[18] See generally Settlement § III.

[19] Settlement at § VI(C)(2).