San Francisco Baykeeper v. Levin Enterprises, Inc.
Docket: No. C-12-04338(EDL)
Court: District Court, N.D. California; December 17, 2013; Federal District Court
The order addresses cross-motions for summary judgment in a case involving the Clean Water Act (CWA). Plaintiff San Francisco Baykeeper claims that Defendants Levin Enterprises, Inc. and Levin-Richmond Terminal Corporation violated the CWA and their National Pollutant Discharge Elimination System (NPDES) permit by discharging storm water at their marine bulk terminal. The Plaintiff seeks partial summary judgment on two affirmative defenses, asserting that their notice-of-intent-to-sue letter was sufficient and that the Defendants possess permit coverage for all terminal activities. Conversely, the Defendants seek summary judgment, arguing the inadequacy of the notice and asserting that most activities at the facility do not require a permit.
The Court grants in part and denies in part both motions. The CWA aims to preserve the integrity of U.S. waters, prohibiting pollutant discharges from point sources without an NPDES permit. The CWA exempts most stormwater discharges from permitting requirements, but mandates permits for discharges linked to "industrial activity." The EPA's regulations require NPDES permits for industrial facilities, which include marine transportation facilities classified under Standard Industrial Classification (SIC) code 4491. Activities at these facilities that necessitate permits involve vehicle maintenance, equipment cleaning, or airport deicing operations.
In 1973, the EPA granted California the authority to manage the National Pollutant Discharge Elimination System (NPDES) program, with the State Water Board designated as the implementing agency. This includes issuing, enforcing, and implementing NPDES permits, as per California Water Code Section 13160 and federal law under 33 U.S.C. 1342(p)(2)(E). The State Board issued a statewide General Permit for industrial discharges in 1991, which was modified in 1992 and reissued in 1997. To legally discharge storm water, facilities involved in specific industrial activities must comply with this General Permit, necessitating a Notice of Intent (NOI) to comply, which signifies agreement with the permit's terms. The General Permit mandates four primary requirements: 1) implementation of best management practices (BMPs) to mitigate pollutants in storm water discharges; 2) prohibition of discharges that exceed water quality standards; 3) development of a Storm Water Pollution Prevention Plan (SWPPP); and 4) establishment of a Monitoring and Reporting Program (MRP), including annual reporting to the Regional Water Quality Control Board.
Defendant LRTC operates the Levin Facility, a dry bulk cargo marine terminal located in Richmond, California. Levin Enterprises, Inc. owns parts of the facility, while 799 Wright Avenue LLC, solely owned by Levin Enterprises, owns the South Parr Yard. The facility receives dry bulk cargo via truck or rail, stores it temporarily, and loads it onto ships, featuring two berths and primarily outdoor storage. LRTC holds an air permit from the Bay Area Air Quality Management District for its operations. In 1992, Defendants submitted a Notice of Intent for a General Permit to discharge stormwater linked to industrial activities, identifying the facility as a marine bulk terminal with various industrial activities, including material storage and handling of substances like scrap metal and bauxite. The facility spans approximately 43 acres. After the General Permit expired in 1997, Defendants re-enrolled in 1998, certifying compliance with permit provisions, including the development of a Storm Water Pollution Prevention Plan (SWPPP). The first SWPPP was submitted in June 2008, with subsequent updates in 2006-2012, and the latest from 2013 indicates that Defendants manage all stormwater runoff.
On June 5, 2012, the Plaintiff issued a Notice-of-Intent-to-Sue letter to Defendants, indicating plans to file suit under the Clean Water Act. This letter, approximately 20 pages long with attachments, outlines the Plaintiff's advocacy role, details Defendants' operations, and asserts that their industrial activities contribute to stormwater pollution affecting the San Francisco Bay watershed, along with specific alleged violations of the Clean Water Act.
On March 18, 2013, Shin-Roei Lee, Chief of the Regional Board’s Watershed Division, informed Defendants that the Levin Facility has been under the General Permit since 1992 and must maintain a Storm Water Pollution Prevention Plan (SWPPP). After reviewing the Defendants’ 2013 SWPPP and the 2011-2012 Annual Monitoring Report, Lee concluded that the Terminal must remain covered by the Permit due to: (1) discharges of polluted stormwater from dry bulk material storage and handling; (2) inadequate structural and non-structural controls for preventing pollutant discharges; and (3) laboratory analyses indicating stormwater pollutants exceeding U.S. EPA benchmarks. On April 9, 2013, Defendants contested Lee's letter. In response, on May 29, 2013, Yuri Won, Senior Staff Counsel, clarified that while the handling of coke piles is not explicitly listed under the General Permit, the Levin-Richmond Terminal (LRTC) had filed a Notice of Intent (NOI) to comply with the General Permit concerning these activities.
Subsequently, on May 2, 2013, Regional Board staff inspected the facility and identified violations of the General Permit, leading to a Notice of Violation (NOV) issued on June 11, 2013. In a response to the NOV dated July 30, 2013, Defendants’ counsel, Catherine Johnson, asserted that LRTC has been managing its activities in line with the General Permit on a voluntary basis and expressed a desire to continue this cooperation with the Regional Board. Johnson noted that the bulk material handling activities are not subject to the General Permit, despite the Regional Board's expectation of compliance with the NOI, including those activities. Additionally, Lee provided a declaration detailing her experience with the Regional Board, stating that the Board does not take a position on the lawsuit between private parties but seeks to clarify any misattributed statements.
Ms. Lee highlights that the Regional Water Board has not formally mandated that LRTC maintain permit coverage for activities outside the General Permit's scope. She emphasizes that bulk material handling and storage at transportation facilities are not classified as industrial activities requiring a permit under the General Permit. Additionally, she notes that there has been no formal action from the Regional Water Board asserting that LRTC's discharges violate water quality standards or significantly contribute pollutants to U.S. waters according to 40 CFR section 122.26(a)(1)(v).
The legal standard for summary judgment allows it to be granted when there is no genuine issue of material fact, entitling the movant to judgment as a matter of law. Material facts are those that could impact the case's outcome, and a genuine dispute exists if sufficient evidence could lead a reasonable jury to favor the nonmoving party. The court assesses facts favorably for the nonmoving party without weighing evidence. A moving party must demonstrate the absence of genuine issues, and if they meet this burden, the opposing party cannot rely solely on allegations but must present specific facts to show a genuine issue for trial. If the nonmoving party fails to do so, the moving party is entitled to judgment.
If summary judgment is denied, the parties may request summary adjudication under Rule 56(g), which can establish material facts not in dispute, thereby narrowing the issues while keeping the court's ability to adjudicate all claims intact. This can also be used to address affirmative defenses.
Two primary questions arise at this stage of the case: the coverage of activities at the Levin Facility under the General Permit and the sufficiency of Plaintiff's Notice Letter. Although these issues are interconnected, the Court will first address the scope of the General Permit before evaluating the Notice Letter.
Regarding the scope of the Permit Coverage, there is a fundamental disagreement between the parties about whether the majority of Defendants' activities require General Permit coverage. Plaintiff asserts that Defendants sought Permit coverage for all activities in 1992, including bulk handling and storage of cargo, and argues that having benefited from the Permit since then, Defendants are obligated to comply with its requirements. Conversely, Defendants contend that they could not have requested coverage for activities explicitly excluded by the Permit’s language and claim they are being unfairly penalized for their voluntary efforts to manage storm water discharges.
The General Permit for Discharges of Storm Water Associated With Industrial Activities in California specifically covers industrial activities at transportation facilities, including vehicle maintenance and equipment cleaning, as applicable to the Levin Facility. Defendants have engaged in these activities, confirmed by their 1992 Notice of Intent (NOI), which indicated compliance with the Permit for material storage, vehicle maintenance, and material handling. However, the language of the Permit does not extend coverage to bulk material handling and storage at marine terminals.
Despite Plaintiff's claims that Defendants are required to maintain site-wide Permit coverage for the entire facility, the evolving stance of the Regional Board and the Permit’s explicit language contradict this assertion. The NOI binds Defendants to the terms of the Permit but does not impose obligations beyond those terms. Although the Court may interpret the scope of Permit coverage using contract principles, the Permit itself is unambiguous in limiting coverage to vehicle maintenance and equipment cleaning.
Plaintiff suggests Defendants could have amended their NOI or terminated their Permit coverage, but Defendants assert they are compliant with the current terms and thus see no need for such amendments. Defendants' counsel indicated a willingness to explore alternative arrangements with the Regional Board due to ongoing disputes regarding stormwater management, but ultimately, the General Permit does not necessitate coverage for bulk material handling and storage operations.
The Regional Board's stance on permit coverage for the Defendants has evolved significantly. Initially, the staff maintained that the Defendants were required to have permit coverage for all activities. However, Chief of the Regional Board’s Watershed Division, Shin-Roei Lee, clarified that there is no formal position from the Board regarding the lawsuit between two private parties. She stated that the Board has not formally adopted the view that LRTC must maintain permit coverage for activities not subject to the General Permit. Additionally, Lee indicated that the General Permit does not classify bulk material handling and storage at transportation facilities as industrial activities requiring a permit. Furthermore, the Board has not taken any formal action asserting that discharges from LRTC violate water quality standards or significantly contribute pollutants to U.S. waters. The evolution of the Board's position is highlighted by changes in correspondence from 2013, transitioning from a requirement for comprehensive permit coverage to a recognition that certain activities, such as the handling of coke piles, are not covered under the General Permit, prompting questions about the delegation of the Board's residual authority and which opinion should guide the Court's interpretation of relevant laws and permits.
Plaintiff asserts that the Regional Board can exercise residual authority to mandate Permit coverage for all of Defendants' activities, despite the Permit’s limitations. Defendants argue this authority is typically reserved for minor, administrative functions, not significant decisions regarding permit coverage. Under the Clean Water Act, the EPA Director can require permit coverage for discharges violating water quality standards. California's Regional Water Quality Control Boards, which have appointed members and staff, manage these regulations.
Plaintiff contends that many responsibilities assigned to board members can be delegated to the executive officer and staff, who regularly execute tasks like issuing notices of violation and designating storm water discharges requiring Permit coverage. However, when delegation is not allowed, specific formal processes are mandated for certain actions, such as cease and desist orders and administrative liabilities. Defendants argue that the powers of delegation claimed by Plaintiff are overstated and that the cited sections of the California Water Code specify limited authority. For instance, Section 13223(a) permits the executive director to issue civil liability complaints but does not authorize staff to determine if an activity not included in the Permit necessitates coverage.
Additionally, Defendants reference a past instance where Plaintiff urged the inclusion of all transportation facility areas in the Permit, to which the Regional Board responded that expanded coverage requires a formal designation process. This suggests that Plaintiff's argument for informal exercise of residual authority by the Regional Board staff lacks support, as significant changes necessitate formal procedures.
The Regional Board has not exercised its authority regarding the necessity of Permit coverage for LRTC activities. Shin-Roei Lee's declaration states that the Board does not take a position on the lawsuit and has not formally determined that LRTC requires Permit coverage, particularly for bulk material handling and storage activities. Lee notes that the Board has not concluded that discharges from LRTC violate water quality standards or significantly contribute to pollution under 40 C.F.R. section 122.26(a)(1)(v). Although initial communications from the Board suggested that Defendants needed site-wide Permit coverage, these were informal and do not represent official Board policy. The Plaintiff's argument is undermined by the absence of evidence that Board staff can exercise residual authority informally, and the record shows that the Board has not formally addressed the issue at hand. Furthermore, discrepancies exist between the March and May 2013 letters regarding the coverage of coke piles. While federal law allows the EPA or state authorities to determine contributions to water quality violations, the Regional Board has not made such a determination in this case.
The Court must determine if the statute, Permit, and regulations are ambiguous enough to warrant reliance on the agency’s interpretation, as established in Chevron v. Natural Resources Defense Council. The Permit does not explicitly regulate bulk handling and storage at the Levin Facility, leading to confusion regarding the coverage of Defendants’ activities. This confusion arises from ambiguous documentation, including the 1992 NOI form and inconsistent communications from the Regional Board, which has evolved over time. Currently, no formal agency position exists indicating that LRTC requires Permit coverage for activities not covered by the General Permit, nor confirming that their discharges violate water quality standards.
Despite this, the Plaintiff argues for deference to the Regional Board's stance that storm water discharges from all activities, including bulk handling, fall under the General Permit, claiming this interpretation is reasonable. For an agency's interpretation to be deemed reasonable under Chevron, it must align with the statute's purpose, be a permissible reading of the regulation, and be consistent with past decisions, rather than a post hoc justification. The Plaintiff also references Auer v. Robbins, which supports deference to informal agency interpretations when they reflect the agency's considered judgment.
Additionally, the Plaintiff cites California Public Interest Research Grp. v. Shell Oil Co., where the court deferred to the Executive Director of the Regional Board's interpretation regarding NPDES permit violations. The Director clarified that the narrative standard merely explained the numeric standard and did not alter it, affirming that a numeric standard violation sufficed for enforcement actions. The court concluded that the Water Board's position was clear in determining permit violations based on numeric standards.
The defendant contended that the Water Board had not made a formal determination regarding a violation of the narrative standard and would not enforce until such a determination occurred. The court clarified that these assertions did not contradict the Director’s testimony. The defendants distinguished their case from Auer, where the EPA interpreted its own regulation via an amicus brief, asserting that here, a federal regulation was being interpreted by Regional Board staff. They also differentiated from CalPIRG v. Shell, noting that the Board’s Executive Director, with greater authority than staff, had testified about a permit drafted by the Regional Board, unlike the permit in question. The court found more persuasive the fact that both Auer and CalPIRG involved interpretations presented in briefs or supporting declarations, unlike the Regional Board staff's prior letters. The Lee Declaration was highlighted as the most authoritative statement from the Regional Board regarding the defendants’ permit coverage, confirming that the Permit did not require coverage for bulk handling and storage and that the Board had not taken a formal position on whether the defendants required permit coverage for activities outside the General Permit. Consequently, the court ruled that the defendants were not obligated to have Permit Coverage for activities not specifically listed in the Permit, such as equipment cleaning and vehicle maintenance and storage.
Regarding notice, the Clean Water Act mandates that a citizen plaintiff must provide a 60-day notice of intent to sue. The defendants argued that the Plaintiff's Notice Letter was inadequate, which would preclude the court's subject matter jurisdiction over the claims. The plaintiff countered that its Notice Letter met the CWA’s requirements and adequately informed the defendants of their claims. The court noted that the sufficiency of the notice letter was the first issue to be addressed. Throughout the summary judgment briefing, the plaintiff introduced new arguments concerning the defendants' activities at the Levin Facility, maintaining that a 1992 Notice of Intent (NOI) triggered sitewide Permit coverage, including bulk handling and storage. The plaintiff also raised new claims that the defendants’ equipment represented "point sources" requiring Permit coverage and that stormwater at the Levin Facility co-mingled with runoff from maintenance and cleaning operations, necessitating Permit coverage. The court will determine if these arguments were sufficiently detailed in the plaintiff's Notice Letter.
The Clean Water Act (CWA) mandates specific notice requirements for alleging violations of effluent standards or limitations, as outlined in 40 C.F.R. 135.3. A notice must provide sufficient information to identify the specific standard or order violated, describe the alleged violation's activity, specify the location and responsible parties, include the dates of the violation, and provide contact information for the notifier and their legal counsel. Courts recognize three main functions of this notice: (1) enforcement, by alerting agencies to violations; (2) compliance, by allowing violators to rectify issues voluntarily; and (3) facilitating settlement discussions. The Supreme Court has ruled that the 60-day notice provision is a strict prerequisite for initiating lawsuits, and failure to adhere to these formalities may prevent courts from exercising jurisdiction over the case. While the regulation does not specify the exact details required in the notice, it does demand enough information for the recipient to ascertain the dates of violations, which should ideally be precise or within a limited range. Courts have established that while plaintiffs need not enumerate every specific violation or date, they must provide sufficient detail to inform the recipient of the violations. The plaintiff claims that their Notice Letter, which is detailed and approximately 20 pages long, satisfies the CWA's requirements.
Plaintiff conducted a review of publicly available documents, including Defendants' 2003 Storm Water Pollution Prevention Plan (SWPPP), Monitoring Reports, and Annual Reports, and visually inspected the Levin Facility. The review revealed specific permit violations, including Discharge Prohibitions A(1) and A(2), Effluent Limitations B(1) and B(3), and Receiving Water Limitations C(1) and C(2). The Notice Letter outlines activities at the facility, such as bulk material storage and vehicle maintenance, detailing operations and stormwater management based on Defendants' self-reported data.
The letter indicates ongoing discharge violations linked to significant rain events, with Attachments A and B listing specific pollutant exceedances and dates of rain events from September 2007 to March 2012. Pollutants identified include heavy metals, benzene, oil and grease, and various pesticides. Plaintiff asserts that Defendants' inadequate management of pollutants leads to contaminated stormwater discharges in violation of the Permit.
Defendants contest the Notice Letter, claiming it lacks clarity regarding the alleged violations and their specifics, including the source of zinc exceedances. They argue the absence of numeric effluent limits in the General Permit and insufficient detail about the violations render the Notice Letter inadequate for taking remedial action.
Defendants contend that previous notice cases, such as Friends of Frederick Seig Grove, dealt with non-storm water point source discharges that included effluent limits, which the General Permit in question lacks. They argue that exceeding such limits constitutes a per se violation, requiring self-monitoring and disclosure of exceedances, a standard not applicable under the General Permit. While the Plaintiff acknowledges that exceeding Water Quality Standards (WQS) is not a definitive violation of the General Permit, they argue it indicates the Defendants' failure to implement required Best Management Practices (BMPs).
Defendants refute factual claims in the Notice Letter, asserting that their Annual Reports show no evidence of pollutants such as PCBs or benzene in storm water discharges over the past five years. They emphasize that the Plaintiff did not conduct independent monitoring prior to issuing the Notice Letter, relying solely on Defendants' data. Disputes also arise regarding the condition of a concrete cap at the facility, with Defendants claiming it is intact and regularly inspected by the EPA, who confirmed its soundness in 2012. The EPA report cited by the Plaintiff acknowledged visible surface cracks but indicated they were not significant issues.
Additionally, Defendants challenge the allegation regarding rail-car cleaning, asserting they do not engage in this practice and had informed the Plaintiff of this prior to litigation. The Plaintiff's initial complaint included this allegation, but it was not retained in the First Amended Complaint. Defendants argue that the Plaintiff's investigation prior to the Notice Letter was insufficient, failing to adequately review publicly available information regarding materials stored and BMPs implemented by the Defendants. The Storm Water Pollution Prevention Plan (SWPPP) must detail a discharger's BMPs, as outlined in the Permit.
At the time of sending the Notice Letter, Plaintiff relied on an outdated 2003 Storm Water Pollution Prevention Plan (SWPPP), rather than reviewing Defendants' current SWPPP. Plaintiff had previously requested public records in November 2011, receiving the 1992 Notice of Intent (NOI), the 2003 SWPPP, and some annual reports. The Notice Letter was filed on June 5, 2012, before Plaintiff reviewed more recent documents obtained in July and September 2012, including Defendants' latest SWPPP. Defendants' counsel, Catherine Johnson, indicated that she had offered the updated SWPPP to Plaintiff prior to the lawsuit's filing. Defendants argue that Plaintiff's reliance on outdated information undermines the "good-faith allegations" required for proper notice under the Clean Water Act, citing the Supreme Court's ruling in Gwaltney v. Chesapeake Bay Foundation. They contend that the Notice Letter fails to assist Defendants in achieving compliance due to numerous alleged violations lacking suggested remedies, rendering it incomprehensible and filled with "fictitious factual assertions."
In defense, Plaintiff emphasizes that the Notice Letter is primarily based on Defendants' own self-reported data. For instance, while Defendants assert that no bauxite has been stored at the Levin Facility since 2008, their 2010-2011 Annual Report contradicts this claim. Plaintiff also contests Defendants' assertions regarding other pollutants, referencing the June 2003 SWPPP, which includes a Hazardous Materials Business Plan listing various materials stored at the facility. Plaintiff argues its language in the Notice Letter is instructive, using phrases like "including but not limited to" to signify potential pollutants, and asserts that specific dates of alleged violations indicate Defendants' failure to implement required Best Management Practices (BMPs) consistent with the General Permit.
Plaintiff claims that Permit violations occur during and after every rain event, supported by Exhibit B, which lists dates over a five-year period with at least 0.1 inches of precipitation near the Levin Facility. The Plaintiff asserts that Defendants continuously violate the SWPPP and M.RP requirements, referencing the case Friends of Frederick Seig Grove. It is noted that courts do not necessitate specific dates for violations linked to the failure of the violator to act. Regarding rail car cleaning, the Plaintiff based its allegations on Defendants' self-reported vehicle maintenance activities, and a 1992 Notice of Intent (NOI) indicated applicable limits for rail car cleaning. The Plaintiff argues that amending the complaint to remove railcar cleaning allegations fulfilled the purpose of the 60-day notice period. After receiving the Notice Letter, Defendants updated their SWPPP and began implementing new pollution control measures, which supports the adequacy of the notice according to Southwest Marine. The Plaintiff maintains that extensive discovery is not required before issuing a Notice Letter per the Clean Water Act, emphasizing reliance on available information. Although the Court has some concerns regarding the Plaintiff’s Notice Letter and investigation, it finds the Notice Letter adequate for the claims presented. The Plaintiff's letter meets necessary formalities, contrasting with cases where notice letters were rejected for lack of required notifications. The regulation mandates that a notice must specify the violated standard, activity, responsible persons, location, and dates of violations. Additionally, in San Francisco BayKeeper v. Tosco Corp., the Ninth Circuit reversed a summary judgment in favor of a defendant coke facility owner.
The court affirmed that the regulations require only reasonable specificity in notice letters, finding BayKeeper's notice adequate despite lacking specific dates for some alleged violations. The court emphasized that Tosco, the defendant, had superior knowledge of the ship loading dates, thus the general allegations of coke spills during loading met notice requirements. The court referenced its prior ruling in Bosnia Dairy, allowing BayKeeper to pursue claims for violations within the time frame outlined in its notice. The key issue was whether BayKeeper could assert claims for illegal discharges on days with sufficient wind, even without specific dates. The court determined the notice sufficiently identified the violation (coke blowing from piles into water) and enabled Tosco to take corrective action. Comparatively, BayKeeper's current claims regarding discharges during rainfall were deemed even more specific due to provided rainfall dates. The Ninth Circuit’s ruling in WaterKeepers Northern California supported the adequacy of notice despite disputes over specific chemicals, stating that the intent-to-sue letter must inform the defendant of alleged violations. Ultimately, the court concluded that the notice letter met regulatory standards, as it provided sufficient information for the defendants to identify and address the alleged violations, despite concerns about reliance on outdated documents.
The Plaintiff is responsible for investigating relevant materials related to their case. The Court questions why the initial public records request from November 2011 did not produce the most recent Storm Water Pollution Prevention Plan (SWPPP) and Annual Reports. The Plaintiff later obtained these documents following a Notice Letter, and the Defendants assert that the Plaintiff was aware of the newer SWPPP before filing the lawsuit. However, the Court finds that the potential over-inclusiveness of the documents does not invalidate the Notice Letter. A key issue for the Court is identifying which activities are addressed in the Notice Letter, especially since the Court determined that the Defendants' bulk material handling and storage activities do not require Permit coverage. The sufficiency of notice regarding the Plaintiff's claims related to vehicle maintenance and equipment cleaning, which do require Permit coverage, is critical.
The Defendants argue that the Notice Letter does not clearly connect the allegations to vehicle maintenance and equipment cleaning at their facility, failing to specify equipment cleaning instances or the location and timing of alleged violations, other than referencing rainy days. In response, the Plaintiff claims that any lack of detail is due to the Defendants' inadequate SWPPP, which lacks descriptions of their vehicle maintenance and cleaning operations. The Plaintiff contends that strict compliance with the Clean Water Act's notice requirement does not necessitate referencing non-existent plan provisions. They assert that the violations related to vehicle maintenance and cleaning are similar to those described in detail in the Notice Letter.
Citing the Ninth Circuit's decision in Henry Bosma Dairy, the Plaintiff argues that notice can be adequate even for violations discovered post-notice, provided they stem from the same source and nature. However, the Court distinguishes this case from Henry Bosma Dairy by noting that the Plaintiff's allegations about storm water discharges involve multiple materials and sources across a 42-acre facility, making the situation more complex and diverse.
Plaintiffs must provide a Notice Letter that clearly details all claims and arguments against Defendants to specify violations and suggest corrective actions. The Plaintiffs cannot generalize claims, particularly regarding vehicle maintenance and equipment cleaning, as similar to those concerning bulk material handling. The Court emphasized that the Notice Letter must allow Defendants to identify alleged violations per 40 C.F.R. 135.3(a). During the hearing, the Court raised two new arguments: first, that stormwater from a Permit-required area mixed with that from a non-Permit area necessitates Permit coverage for the entire facility; second, referencing Ecological Rights Foundation v. Pacific Gas & Electric, that many of Defendants’ devices are point sources. The Court will assess whether these claims were included in the Notice Letter and will first examine the scope of Defendants’ vehicle maintenance and equipment cleaning operations and the adequacy of Plaintiffs' notice regarding these operations.
Plaintiffs assert these activities occur throughout the Levin Facility, warranting full Permit coverage, while Defendants argue their operations are distinct and should not be subjected to Permit regulations. Plaintiffs base their claims on detailed observations from Ian Wren and Defendants’ own documentation, identifying three maintenance areas: an equipment repair building, a lubrication area, and a locomotive repair area. The Equipment Repair Building is enclosed, with an adjacent steam-cleaning containment area, while the lubrication station is part of the paved Main Terminal. Rail cars are serviced over a concrete-lined vault designed for spill containment. The Main Terminal also contains fueling stations, and some equipment is maintained in situ, while others are serviced on paved areas with spill containment measures. Additionally, Plaintiffs observed a mobile steam-cleaning unit operating near a clamshell bucket storage area, further supporting their claim of extensive maintenance operations at the facility, which they argue necessitate comprehensive Permit coverage as per an EPA decision.
In San Pedro Forklift, the Environmental Appeals Board overturned an Administrative Law Judge’s (ALJ) ruling that the San Pedro Forklift facility was not subject to regulation under 40 C.F.R. 122.26(b)(14)(viii) as a transportation facility with vehicle maintenance and equipment cleaning operations. The Board criticized the ALJ for narrowly defining “vehicle maintenance shop” and “equipment cleaning operations,” emphasizing that these terms should align with the Clean Water Act (CWA) and the EPA's broader interpretation of its regulations.
The Board clarified that a "vehicle maintenance shop" refers to any designated area where vehicle maintenance occurs regularly, while "equipment cleaning operations" encompasses cleaning of industrial equipment on-site as part of a business practice. It rejected the EPA's position that mere evidence of such activities suffices to establish regulatory requirements, noting that the size or characteristics of a maintenance shop are irrelevant if any repairs occur in designated areas.
The Board highlighted that maintenance must occur in a non-transient area, whereas equipment cleaning can take place at any location once a business process for cleaning is established. It reiterated that any cleaning done under this established process must adhere to storm water permitting requirements.
The defendants did not dispute the plaintiffs' factual claims regarding the locations of vehicle maintenance and equipment cleaning at the Levin Facility but contested the characterization of these activities as being widespread across the facility. They argued that the plaintiffs were attempting to expand the Permit’s coverage beyond vehicle maintenance and cleaning to the entire transportation facility, which the State Board had previously rejected due to the need for a formal designation process. Despite this, the defendants did not address the San Pedro Forklift Board’s decision in their briefs. It remains undisputed that the defendants' vehicle maintenance and equipment cleaning operations require Permit coverage, and the plaintiffs' notice of violations regarding these operations was deemed sufficient.
Defendants’ vehicle maintenance and equipment cleaning operations at their facility are central to the dispute, with the extent of maintenance practices being a factual issue unsuitable for summary judgment. Initially, Plaintiff contended that these operations necessitated Permit coverage for the entire Levin Facility due to their location throughout the site. However, Plaintiff has expanded its argument, claiming that discharges from these operations intermingle with those from bulk handling and storage, thus requiring comprehensive Permit coverage.
Plaintiff cites the Permit language and EPA regulations, asserting that stormwater discharges from non-industrial areas are exempt unless mixed with discharges from regulated industrial activities. The Permit defines "Storm Water Associated with Industrial Activity" as pertaining to discharges linked to manufacturing, processing, or raw materials storage. It further specifies that material handling activities are excluded when they are separate from industrial activities, provided their drainage does not mix with stormwater from industrial areas.
Plaintiff argues that since stormwater from industrial activities (vehicle maintenance and equipment cleaning) mixes with non-industrial stormwater through multiple discharge points, the entire Levin Facility falls under Permit regulations. In contrast, Defendants challenge this interpretation, arguing that it seeks to bypass established rule-making processes, emphasizing that the cited provisions apply only to regulated material handling activities, which do not include operations at marine terminals, where only vehicle maintenance and equipment cleaning require General Permit coverage.
The definition of "material handling activities" excludes parking lots and office buildings from regulatory oversight, provided their drainage does not mix with stormwater from industrial areas. Defendants contend that even if commingled discharges are regulated, it is illogical to interpret that all activities at a marine terminal fall under such regulation. They assert that this interpretation would unfairly penalize them for voluntarily implementing pollution controls, such as infrastructure for stormwater management. The Plaintiff's commingling argument was introduced in a reply brief, prompting the Court to determine if it was included in the Plaintiff’s Notice Letter, as required by 40 C.F.R. 135.3. The Plaintiff claims the Notice Letter identifies vehicle maintenance as a pollution source, with discharges from this operation mixing with those from other facility activities. The Notice Letter details various industrial operations at the Levin Facility, describing inadequate measures to prevent stormwater exposure to pollutants and the tracking of pollutants from the facility onto public roadways. At a hearing, the Court inquired about which claims in the First Amended Complaint related to the commingling argument, to which the Plaintiff responded that the First, Fourth, and Fifth claims for violations of effluent limitations included this argument. These claims address the discharge of stormwater and non-stormwater pollutants from the Levin Facility, as outlined in the Notice Letter.
Claims regarding discharges from the Levin Facility are criticized for being overly general and primarily addressing discharge prohibitions rather than the specifics of pollutant mechanisms, with a notable absence of reference to "commingling" of discharges in the Notice Letter. The Notice Letter failed to specify that discharges from permitted activities (vehicle maintenance and equipment cleaning) intermingle with those from non-permitted activities (bulk handling and storage), which is essential for establishing liability under the Permit. As the Plaintiffs did not adequately inform the Defendant of their commingling theory in compliance with statutory notice requirements—specifically, the need to detail the alleged violations, responsible parties, and violation dates—this deficiency results in a lack of jurisdiction for the Court to hear the claim, leading to a summary judgment in favor of the Defendants on that issue.
Additionally, the Plaintiffs have pivoted their argument to claim that certain pieces of the Defendants' equipment qualify as "point sources" under the Clean Water Act, which defines point sources as discernible and discrete conveyances of pollutants that require permit coverage. The Plaintiffs originally alleged ongoing discharges of pollutants without NPDES Permit coverage since June 2007 but have now shifted focus from fugitive dust to direct discharges from specific equipment. This change in argument comes in response to a recent Ninth Circuit ruling that narrowly defined "point sources," indicating a strategic adaptation by the Plaintiffs in light of judicial precedent.
Plaintiff asserts that the Ecological Rights Foundation clarifies that the MPDES permit is required for all discharges except certain storm water discharges, particularly those associated with industrial activity. This claim misrepresents the case, which states that the EPA mandates NPDES permits only for specific storm water categories. Plaintiff alleges that Defendants are engaging in prohibited non-storm water discharges or unpermitted point source discharges to U.S. waters, as governed by the Clean Water Act, even if pollutants are airborne from various equipment. The Ninth Circuit categorizes point sources into three types: those explicitly identified by the CWA, those designed to store or transport pollutants, and those universally acknowledged as point sources. Examples include machinery like bulldozers and backhoes, which have been recognized as point sources in previous rulings. Plaintiff contends that Defendants' railcars qualify as rolling stock under the first category of point sources, while other equipment (trucks and loaders) falls under the second category. Additionally, Plaintiff argues that a sloped wooden deck at the Levin Facility acts as a point source by allowing pollutant discharge into water. Recent Ninth Circuit rulings indicate that some of Defendants’ equipment may qualify as point sources for storing or conveying pollutants, with railcars specifically recognized as point sources under the Clean Water Act.
Defendants did not address the issue of point source discharges in their reply brief, only referencing the case Alaska Community Action on Toxics v. Aurora Energy Servs. LLC, which determined that coal dust discharges from stockpiles and equipment do not qualify as point source discharges. The court defined point sources based on whether pollution reaches water through a confined, discrete conveyance, emphasizing that the coal piles and related equipment at the Seward Facility do not meet this criterion as they lack a distinct means of transport to the water. Defendants claimed that dust discharges from their equipment were not point sources, but this reasoning is less persuasive following a conflicting Ninth Circuit ruling.
The court is tasked with evaluating whether the Plaintiffs' Notice Letter provided adequate information regarding point source discharges, referencing specific allegations about industrial operations at the Levin Facility. The Notice Letter indicated that operations lacked measures to prevent pollutant exposure and listed various pollutant sources, including equipment used for material handling. While some details in the Notice Letter were deemed too vague for the commingling argument, the descriptions of equipment like conveyors, forklifts, and trucks were sufficiently specific to meet the statutory notice requirements. The Ninth Circuit has categorized such equipment as point sources designed for handling pollutants, thus fulfilling the requirement for the Plaintiffs' argument regarding these point sources and their alleged violations.
The excerpt addresses the alleged violations related to Defendants' equipment and vehicles as pollutant sources, specifically noting that the Notice Letter includes these claims. The Plaintiffs argue that their First Amended Complaint adequately details specific equipment contributing to dust emissions, which supports their notice claims. The Court denies Defendants' motion for summary judgment regarding notice.
Defendants contend that if the dust constitutes a point source discharge, it is protected under the permit shield of the General Permit, which grants that compliance with the permit is deemed compliance with other statutes, protecting from strict liability for unauthorized discharges, provided they were disclosed and not expressly prohibited. The leading case cited, Piney Run Preservation Ass’n v. County Commissioners of Carroll County, outlines that the permit shield applies if the permit holder adheres to the permit's terms and disclosure requirements.
Defendants assert that the General Permit does not prohibit discharges from loading and unloading activities and that they disclosed relevant material handling and storage activities in their 1992 Notice of Intent (NOI). However, Plaintiffs argue that the Permit explicitly prohibits non-storm water discharges not listed in a specific condition and cite violations noted by the Regional Board regarding coke discharges.
The Court highlights significant factual disputes regarding Defendants' compliance with the General Permit, leading to the denial of their summary judgment motion on this issue. Ultimately, the Court grants summary adjudication to Defendants concerning whether the General Permit encompasses all their activities, clarifying that it only covers discharges tied to "industrial activity," which does not include Defendants' bulk material handling operations.
The Court grants summary adjudication in favor of Plaintiff regarding the adequacy of the Notice Letter, except for one issue. It denies summary adjudication to Defendants concerning the Plaintiff's claim that discharges from Permit-covered activities are commingled with those not covered, which would trigger permit coverage for all discharges. This claim was not included in the Notice Letter, thus the Court lacks jurisdiction to address it. The Court denies summary adjudication for Defendants on the issue of whether some of their equipment qualifies as “point sources” under the Clean Water Act, necessitating Permit coverage. Additionally, the Court denies Defendants' use of the permit shield as an affirmative defense. A case management conference is scheduled for February 11, 2014, at 10:00 a.m. to review the case's progress. Although the EPA’s Multi-Sector General Permit is not applicable in California, it includes a similar, clearer restriction regarding discharges that are commingled with authorized discharges under the permit.
