In a major victory for clean water utilities, the U.S. Court of Appeals for the Ninth Circuit this week affirmed that states can take compliance costs into account when setting Clean Water Act (CWA) water quality standards variances, and that such variances do not have to ultimately result in attainment of the underlying water quality standard by the end of the variance’s term.  

Siding with arguments made by NACWA, the Montana League of Cities and Towns (League), the U.S. Department of Justice, and the Montana Department of Environmental Quality, the three-judge panel in Upper Missouri Waterkeeper v. EPA unanimously rejected claims made by environmental organizations that the CWA precludes consideration of compliance costs in the development of water quality standards. 

Many wastewater treatment plant variances are premised upon the widespread economic harm implementation of the stringent underlying standards would cause to communities.  The Ninth Circuit’s affirmation that such variances are lawful and actually further the overall aims of the CWA therefore provides critical judicial precedent in support of municipal variances throughout the country.

The panel likewise rejected the holding of the U.S. District Court of the District of Montana that water quality standards variances must require that permittees meet the “highest attainable condition” set by the variance immediately, and ultimately comply with the more stringent underlying water quality standard by the end of the variance’s term.  That holding significantly nullified the usefulness of variances, which are utilized by states where it is in fact unclear if clean water utilities can ever meet the underlying standards. 

Holding that such an interpretation of what water quality standards variances require “reflects a misunderstanding of the nature and purpose of a variance,” the Ninth Circuit pointed to arguments NACWA and the League made throughout the case that variances are specifically designed to result in incremental water quality improvements in a manner that is “fully consistent with the goals of the CWA.”

NACWA was represented in this litigation by Legal Affiliate Barnes & Thornburg and is very grateful for their assistance in this critical case.  NACWA will continue to analyze the decision and will send a more in-depth analysis in the coming weeks.  In the interim, please contact NACWA’s Chief Legal Counsel, Amanda Aspatore, with any questions.