Petition for Writ of Certiorari — Miners Advocacy Council, Inc. v. Alaska Department of Environmental Conservation

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$Y i 0 U 3 a | Supreme Guurt, U.S,

FILED

No. 89-__ EC 14 RS

JOSEPH F. SPANIOL, JR.

In The EK

Supreme Court of the United States

October Term, 1989

MINERS ADVOCACY COUNCIL, INC.,

Petitioner,

THE STATE OF ALASKA, DEPARTMENT OF

ENVIRONMENTAL CONSERVATION; DENNIS D.

KELSO, COMMISSIONER OF THE

DEPARTMENT OF ENVIRONMENTAL

CONSERVATION; TRUSTEES FOR

ALASKA; and NORTHERN ALASKA

ENVIRONMENTAL CENTER,

Respondents.

PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT OF ALASKA

—

Rosert JOHN # .

WILLIAM R. SATTERBERG, JR. *

Law Orrices OF WILLIAM R.

SATTERBERG, JR.

709 Fourth Avenue

Fairbanks, Alaska 99701

(907) 452-4454

#Of Counsel

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO,, (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED FOR REVIEW

(1) May the State of Alaska, through the National

Pollution Discharge Elimination System (NPDES) permit

certification process, simultaneously insert the same

water quality based effluent limitation in several hundred

permits, or must the State instead certify NPDES permits

and insert water quality based effluent limitations on an

individual, case-by-case basis?

(2) Did the State of Alaska waive its right to certify

by failing to certify within the 60-day period prescribed

by law?

(3) When the United States Environmental Protec-

tion Agency (EPA) proposes to modify particular terms of

an NPDES permit, may the State of Alaska via the certi-

fication process modify different NPDES permit terms

which the EPA-proposed permit modification did not

even purport to affect?

(4) Did the State of Alaska’s certification of the

same water quality based effluent limitation for several!

hundred permits, in disregard of whether such a strin-

gent limitation is necessary to meet State water quality

standards in individual cases, effect a taking of property

in violation of the Fifth and Fourteenth Amendments?

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW...........

TABLE OF CONTIN... ii

TASLE OF AUTHGRTEe....os. as V

OPINION MRLAWW ios. tee 1

JURISDICTION OF THE COURT................... 1

CONSTITUTIONAL PROVISIONS, STATUTES, AND

REGULATIONS INVOLVED .................005. 1

STATEMENT OF THE CAGE? nse ees 2

REASONS FOR GRANTING THE WRIT ........... 13

I. THE STATE MUST CERTIFY WATER QUAL-

ITY BASED EFFLUENT LIMITATIONS ON

AN INDIVIDUAL, CASE-BY-CASE BASIS.. 14

II. BY FAILING TO CERTIFY WITHIN THE 60-

DAY PERIOD PRESCRIBED BY LAW, THE

STATE WAIVED ANY RIGHT TO CERTIFY

THE NPURES PRRMIIED «once ccecnaticsscss: 18

Ill. THE STATE ILLEGALLY INSERTED THE

0.2ML/L SETTLEABLE SOLIDS EFFLUENT

LIMITATION IN THE 446 NPDES PERMITS

WHICH EPA PROPOSED TO MODIFY

ONLY WITH RESPECT TO TURBIDITY

AND) ARINC 6 os00655sn5cuue eee ee 21

be on Re On eh ct MOE palidoes

ili

TABLE OF CONTENTS - Continued

Page

IV. THE STATE EFFECTED A TAKING OF PRI-

VATE PROPERTY IN VIOLATION OF THE

FIFTH AND FOURTEENTH AMENDMENTS

BY CERTIFYING THE SAME WATER QUAL-

ITY BASED EFFLUENT LIMITATION FOR

SEVERAL HUNDRED PERMITS WITHOUT

DEMONSTRATING THAT SUCH A STRIN-

GENT LIMITATION IS NECESSARY TO

MEET STATE WATER QUALITY STAN-

DARDS IN EACH INDIVIDUAL CASE .... 22

eas is ok wa xs Givens hs <tnce sen ieee 28

APPENDIX A - Opinion of the Alaska Supreme

RNG E CU5a 64 4 00%s 440s 4500 App. 1

APPENDIX B - Memorandum Decision of the

Alaska Superior Court...... App. 32

APPENDIX C - Decision of the Deciding

Officer, Alaska Department of

Environmental Conservation

cet vacrec\enwaeks App. 45

APPENDIX D - Order Denying Rehearing in

ee ery ee App. 68

APPENDIX E - Order Denying Rehearing in

a ee a App. 70

APPENDIX F - Petition for Rehearing

ih 5S 0'p +5540 60 00% App. 72

APPENDIX G - Letter from EPA to State

DEC Initiating Certification Peri-

Ree LS. ce cae a as App.

TABLE OF CONTENTS - Continued

APPENDIX H - Draft Permit with EPA-

Proposed NPDES Permit Mod-

ifications for Turbidity and

Se rep eer

APPENDIX I - Fact Sheet Giving Notice of

Proposed NPDES Permit Mod-

ifications for Turbidity and Arse-

on, ELT ES PT eee oe

APPENDIX J - Letter from EPA to Placer Miners

Concerning Proposed NPDES

Permit Modifications for Turbi-

. 101

dity and Arsenic...........

APPENDIX K - Letter from State DEC to

APPENDIX L - State DEC Certification/

Certificate of Reasonable Assur-

APPENDIX M - _ Documents Filed in the State

POOUM ios asdseee eee

APPENDIX N -_ Transcript of State DEC Adjudi-

Page

App. 91

catory Hearing (Excerpt).. App. 147

APPENDIX O - Constitutional Provisions,

Statutes, and Regulations

App. 148

RL a ke oo, cee

TABLE OF AUTHORITIES

Cases

Armstrong v. United States, 364 U.S. 40 (1960)........ 23

Best v. Humboldt Mining Co., 371 U.S. 334 (1963)..... 22

Costle v. Pacific Legal Foundation, 445 U.S. 198

(1980), rehearing denied, 446 U.S. 947 (1980)........ 21

Dobbins v. City of Los Angeles, 195 U.S. 223 (1904) .... 27

Environmental Defense Fund v. Alexander, 501

F.Supp. 742 (N.D. Miss. 1980), affirmed in part,

reversed in part on other grounds, 651 F.2d 983

(5th Cir. 1981), on remand, 554 F.Supp. 451 (N.D.

PE Sas FR es Woewanetes poke eeveda Nea Shc 19

E.P.A. v. California ex rel. State Water Resources

Control Board, 426 U.S. 200 (1976)................. 16

Hallstrom v. Tillamook County, ___ U.S. ___, 58 US.

a nat oe ae he ere ee Ca 20

Homestake Mining Co. v. United States Envtl. Protec-

tion Agency, 477 F.Supp. 1279 (D.S.D. 1979)........ 10

].E.D. Associates, Inc. v. Atkinson, 121 N.H. 581, 432

ee gnc lvicn ccc nek maka eaee er eees 26

Lake Erie Alliance v. U.S. Corps of Engineers, 526

F.Supp. 1063 (W.D.Pa. 1981), affirmed 707 F.2d

1392 (3rd Cir. 1983), cert. denied., 464 U.S. 915

SUING Wiad s Spckace Nn bo eee cn ee es ORE PET OLAS 12

Lawten ©. Stecke, 132 US. 133 (IGP)... os ess was. 28

Leo Sheep Co. v. United States, 440 U.S. 668 (1979) .... 18

Marathon Oil Co. v. E.P.A., 830 F.2d 1346 (5th Cir.

Ds nu vbe cx ha kes cee we ca ese ee 12, 14, 16, 20, 27

TABLE OF AUTHORITIES - Continued

Natural Resources Defense Council v. E.P.A., 273

U.S.App. D.C. 240, 859 F.2d 156 (1988).........

Nollan v. California Coastal Commission, 483 US.

MN RE rere re roe 24,

Penn Central Transportation Co. v. City of New York,

COD UE re Re ons o's cadveasenauseseseets-

Pennell v. City of San Jose, __ U.S. __, 108 S.Ct.

SOD, FS RBA FT CGI aos a icles vaccssscnses

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922) ..

Roosevelt Campobello International Park Commission

v. E.P.A., 684 F.2d 1041 (1st Cir. 1982)..........

Seacoast Anti-Pollution League v. Costle, 527 F.2d

872 (1st Cir. 1978), cert. denied, 439 U.S. 824

(IGF ED oc cc ccccctacasbUiieseks sesh eeeeeteeRnernis

Town of Sutton v. Water Supply and Pollution Control

Commission, 116 N.H. 154, 355 A.2d 867 (1976)...

Trustees for Alaska v. E.P.A., 749 F.2d 549 (9th Cir.

BOE). on vccibnce cnet biseees SesencuePeeeee ces

Union Oil Co. v. Smith, 249 U.S. 337 (1919).......

United States v. Coleman, 390 U.S. 599 (1968)......

‘United States v. Florida East Coast Railway Co., 410

UG. 208 CET «5 cvnnedhuesditasnisakeceses tees

United States v. Locke, 471 U.S. 84 (1985) .........

United States v. Riverside Bayview Homes, Inc., 474

SS. “SSE - CRO oan inc sewiscusdayeceieeassavent

26, 27

cae

eS ee ae OR, -

Vii

TABLE OF AUTHORITIES - Continued

Page

CONSTITUTIONAL PROVISIONS

The United States Constitution, Amendment V....1, 22

The United States Constitution, Amendment XIV,

ERG shaw seek cheek ebNs- te. Ebina eee che oh ee keccl 1, 22

STATUTES AND REGULATIONS

United States Code

ee os 5 cance uéake snaped es kame pe as 1

sd. 4 6 o4.ece wwenes sanemm ae 26

ee ao Stace ewe vuaseudaceWeeeen 3

BF Wie MEEPS ow sv onc cn cccsccucnsnseeacns 1, 17

on 0 04 no040s sense keene ean 13

EA a i ain 5 5 50-4 wd aka 0 84s wed 6 aoe bee 1

er NN IE os coc cksnnscctecoeesescies 3, 4, 19

ee a nn cn andcccaseacaedesnedswoaw ae 4

ee IID 50s csc canseccvewusecccctccunee 3

EE ere a eer 2,3

RE Sn Ce rT ro 13

Code of Federal Regulations

pot ek | ree 2, 8, 14

Co renee ys

ee KE | errr a

Sp Gee, ee CUPEE 6 5 ov S vee secececaecees 3. 19

viii

TABLE OF AUTHORITIES - Continued

Page

SD CRE, Be Be hia ha ieee see es cee es 4, 19

40 C.F.R. §124.53(eX2) (1985)... 2.2.2... eee eee ee. 4

40 C.F.R. §124.53(e)(3) (1985)............ 4, 9, 14, 15, 26

CD Ce SD GUND ove dciccssscuccsnesieces re

RULES

Supreme Court Rule 17.1(b)-(c) .................-45. 13

RE GE GD EO 665 co ce dcnsinsestcewess 1

Lecistative History

House Report No. 92-911 (March 11, 1972)...18, 19, 20

FEDERAL REGISTER

Oe Fee I I wis hands ce ead w eee iwcuceecnanecen 19

OP Pe EN, IES oso nccacnuecwscessscbenetunen 15, 19

OPINION BELOW

The decision of the Alaska Supreme Court is offi-

cially reported beginning at 778 P.2d 1126. A copy of the

opinion is set forth in Appendix A. (App. 1-31)

JURISDICTION OF THE COURT

The Alaska Supreme Court rendered its decision in

this case on July 28, 1989. Petitioner Miners Advocacy

Council, Inc. (MAC) filed a timely petition for rehearing

(App. 72-88), which was denied in part on September 7,

1989, and in final on September 15, 1989. (App. 68-71)

Since Petitioner claimed and asserted rights under

the Constitution and statutes of the United States, this

Court has jurisdiction under 28 U.S.C. § 1257(a) to review

by writ of certiorari the decision of the Alaska Supreme

Court.

CONSTITUTIONAL PROVISIONS, STATUTES, AND

REGULATIONS INVOLVED

This case involves the following constitutional provi-

sions, statutes, and regulations. Since the provisions are

lengthy, pursuant to Supreme Court Rule 21.1(f), their

pertinent text is set forth in Appendix O (App. 148-65):

The United States Constitution, Amendment V;

The United States Constitution, Amendment

XIV, § 1;

33 U.S.C. § 1311(b)(1)(c);

33 U.S.C. § 1341;

33 U.S.C. § 1342(a)-(c);

40 C.F.R. § 121.2(a)(2)-(3) (1985);

40 C.RR. § 122.62 (1985);

40 C.ER. § 124.53 (1985);

40 C.RR. § 124.55(b) (1985).

STATEMENT OF THE CASE

This case concerns the fate and livelihood of several

hundred gold miners in Alaska. While their gold mining

operations come in all shapes and sizes, the vast majority

of these miners are individuals or families, some of whom

trace their pursuit of this honest occupation back_to the

turn of the century. Since the imposition of the stringent

conditions at issue in this case, these souls have seen

their numbers decrease dramatically. 778 P.2d at 1130 n.7.

(App. 6-7)

Placer mining in essence involves the labor of gather-

ing from the earth small particles of that precious metal

known as gold. This is accomplished through placing

gold-bearing material, called “pay dirt,” in a channeled-

box known as a “sluice.” By then running water through

the sluice, the miner, through the force of gravity, gathers

the heavier particles, including gold, which collect in the

sluice on small underwater barriers known as “riffles.”

What goes in must come out, and after the pay dirt is

sluiced, it is discharged and captured by the miner, usu-

ally in a self-built settling pond. (App. 19) It is post-

capture discharge or “effluent” which subjects a miner to

the terms of the Clean Water Act.

wont

ne ee ae a

Oe ee

Both the land and the waters of Alaska are such that

they frequently contain naturally high levels of inert,

undissolved arsenic. Accordingly, when the earth is

washed through the miner’s sluice, it is natural for the

level in the receiving water to be increased somewhat by

the effluent. The same holds true for settleable solids,

which are heavier, quickly-settling sediments, and for

turbidity, which is not a pollutant but merely a measure-

ment of the cloudiness of the water. (App. 135-36)

Under Clean Water Act (CWA), 33 U.S.C.

§§ 1251-1387, any person wishing to discharge pollutants

into the waters of the United States must secure an

NPDES permit from either EPA or the source State,

depending on whether EPA has retained or delegated to

the State the permitting authority. 33 U.S.C. § 1342(a)-(c).

EPA has not delegated NPDES permitting authority to the

State of Alaska. Accordingly, while EPA is thus respons-

ible for issuing NPDES permits in Alaska, before EPA

may issue a permit, EPA must provide the State with an

opportunity to review the proposed permit to determine

whether the permit’s terms will meet the State’s water

quality standards. 33 U.S.C. § 1341(a)-(b). This process is

known as “certification.” Id.

Once a State has been presented with a certification

opportunity, the State has three options. The State may

deny certification of an NPDES permit, thus precluding

EPA from issuing the permit. 33 U.S.C. § 1341(a)(1). In

addition, the State may waive certification, either

expressly or by failing to render its certification decision

within the 60-day period prescribed by law. Id.; 40 C.F.R.

§ 124.53(c)(3), (d) (1985).! Third, the State may elect to

certify the NPDES permit. 33 U.S.C. § 1341(a)(1).

If the State does certify an NPDES permit, the State

may specify conditions more stringent than those in the

draft permit which are necessary to meet State water

quality standards, and must include for each such condi-

tion the CWA or State law reference upon which that

condition is based. 33 U.S.C. § 1341(a)(2); 40 C.F.R.

§ 124.53(e)(2). On the other hand, a certifying State is also

required to provide a “statement of the extent to which

each condition of the draft permit can be made less

stringent without violating the requirements of State law,

including water quality standards.” 40 C.F.R.

§ 124.53(e)(3). With the above background in mind, Peti-

tioner will turn to the facts of this case.

In 1984, EPA provided the State of Alaska Depart-

ment of Environmental Conservation (DEC) with the

opportunity to certify 446 NPDES permits to be issued to

placer gold miners in Alaska. At the time, DEC expressly

waived any right to certify the 446 permits. (App. 53, 55)

Accordingly, the 446 placer miners received their NPDES

permits which included, inter alia, a 0.7ml/1 monthly

average and 1.5ml/1 instantaneous maximum e.{luent

limitation for settleable solids. (App. 81, 91, 95)

Subsequent to the State’s waiver of certification and

the issuance of the 1984 permits, the United States Court

of Appeals rendered its decision in Trustees for Alaska v.

E.P.A., 749 F.2d 549 (9th Cir. 1984). This decision held that

' Unless specified otherwise, all future references to the

Code of Federal Regulations will refer to the 1985 C.F.R. as in

effect during the State’s 1985 certification. The relevant 1985

C.F.R. provisions have remained the same through their 1989

codification.

— ee

water quality standards, which are goals that must be met

for a given body of water, are not themselves proper

NPDES permit terms; rather, such water quality stan-

dards need to be translated into particular effluent limita-

tions applicable to an individual discharger. Id. at 556-57.

Thus, the Ninth Circuit held that EPA erred by not requir-

ing an effluent limitation for turbidity and not providing

a public hearing on the question of effluent limitations

for arsenic and mercury. Id. at 557, 561. The court then

remanded the case to the EPA to determine what, if any,

effluent limitations were necessary to meet the State

water quality standards for turbidity, arsenic, and mer-

cury. Id.

In response to the Ninth Circuit’s decision, EPA on

January 31, 1985, gave notice to the 446 permittees that

EPA was proposing to modify their 1984 NPDES permits

to include effluent limitations for turbidity and arsenic.

(App. 101-06) On the same date, EPA notified the State of

Alaska DEC of the proposed modifications. EPA also

provided DEC with copies of the draft permit with its

proposed modifications and informed DEC that the 60-

day period for State certification action was thereby com-

mencing and that the “State will be deemed to have

waived its right unless that right is exercised within 60

days of receipt of this letter.” (App. 89-94) The various

notices of the proposed modification nowhere indicated

that the settleable solids limitation was subject to mod-

ification, and consistent with EPA’s notice that it pro-

posed to modify the 446 permits with respect to turbidity

and arsenic, the proposed modifications which EPA sent

to DEC for certification did not alter the settleable solids

limitation, which remained at the 0.7/1.5 level. (App. 91)

With respect to State certification, the proposed modifica-

tion referred exclusively to limitations for turbidity and

arsenic. (App. 100)

Pursuant to the notice sent out by EPA, EPA and the

State DEC held joint hearings on the proposed modifica-

tion of the 446 existing NPDES permits and to issue 93

new permits for placer mining operations in the State, a

total of 539 individual NPDES permits. (App. 46) Based

on the notification that turbidity and arsenic were the

only conditions being modified, Petitioner MAC mem-

bers submitted comments only in regards to those and

not any other permit conditions. (App. 81) Only after EPA

and DEC held their two public hearings on the permits,

did DEC publicly announce that it intended to modify the

settleable solids limitation in the 446 permits and certify a

settleable solids limitation of 0.2m1/1. (App. 47)

The 60-day period in which the State was to have

certified came and went. Finally, on April 29, 1985, 88

days after EPA initiated the certification, DEC certified en

masse the 539 NPDES permits and inserted in each and

every one of the permits a settleable solids effluent lim-

itation of 0.2ml1/1. (App. 115-16) As authority for certify-

ing a settleable solids effluent of 0.2ml/I, the State

referred to a State water quality standard which did not

even provide for settleable solids until nearly two months

after the State certified the settleable solids effluent.

(App. 58-59, 73-74, 77-79, 82-83, 108) Moreover, the certi-

fication failed to indicate the degree to which the settle-

able solids limitation or any other limitations could be

made less stringent and still comply with State water

quality standards. (App. 115-16) In retrospect, this is not

surprising since, “DEC readily admits that it neither per-

formed site-specific evaluations nor considered informa-

tion contained within individual NPDES applications in

its certification process.” 778 P.2d at 1131 (footnote omit-

ted). (App. 8)

On May 6, 1985, Petitioner MAC, an association of

numerous placer miners who have been directly affected

by the actions of the State in certifying en masse the 539

NPDES permits, filed suit in the Alaska Superior Court,

seeking injunctive relief on several grounds. 778 P.2d at

1130. (App. 6, 37) Among these grounds were: that the

State had illegally conducted a mass certification instead

of certifying on an individual, case-by-case basis as

required by law; that the State had waived any right to

certify the permits by failing to certify within the 60-day

period prescribed by law; that the inclusion of the 0.2m1/1

settleable solids effluent in each of the 539 permits was

done without proper notice and hearing and violated the

procedural due process rights of the permittees; and that

the 0.2m1/1 solids effluent is overly stringent and arbi-

trary so as to effect a taking of property in violation of the

Fifth and Fourteenth Amendments.

Also subsequent to the State’s certification, a number

of parties, including Petitioner and several individual

miners, filed timely requests with DEC for an administra-

tive adjudication of the certification. These requests were

granted and the matters were consolidated. In addition,

Respondents Trustees for Alaska (TFA) and Northern

Alaska Environmental Center (NAEC) intervened in Peti-

tioner’s superior court suit. The superior court continued

its proceedings and retained jurisdiction pending a ruling

by the DEC Deciding Officer. 778 P.2d at 1130. (App. 6)

During the administrative hearing, Petitioner

renewed the arguments made in support of its complaint

for injunctive relief. (App. 117-19) At the adjudicatory

hearing itself, many miners were afraid to or prohibited

from testifying due to pending or threatened EPA

enforcement actions. (App. 147) After the hearing, the

Deciding Officer upheld DEC’s certification. In short, the

Deciding Officer ruled that DEC was not required to

certify on a site-specific, case-by-case basis and could

legally certify on a mass basis; that while the State did

indeed certify in an untimely manner, well outside the 60-

day limit, arguments as to the State’s waiver of any right

to certify should be made to EPA and not in the State

adjudicatory system; that DEC gave proper public notice

and held proper public hearings so as to allow DEC to

certify the 0.2m1/1 settleable solids effluent limitation in

each of the 539 NPDES permits; and that the 0.2m1/1

limitation was not overly stringent and arbitrary. (App.

52-62)

Petitioner appealed the administrative decision to the

superior court, raising again the issues presented in this

Petition. (App. 120-23) The superior court in essence

echoed the Deciding Officer’s conclusions and affirmed

the administrative decision. (App. 37-43) Petitioner then

appealed to the Alaska Supreme Court on August 28,

1987. (App. 124-25) After a lengthy period, the Alaska

Supreme Court rendered its decision.

With respect to Petitioner’s contention that the State

is required to certify NPDES permits on an individual,

site-specific basis rather than en masse, the Alaska

Supreme Court first examined the various regulations

governing State certification of federal licenses and per-

mits. The court took particular note of 40 C.F.R.

Puerco

§ 121.2(a)(2) which requires the certifying agency to pro-

vide a statement that the agency has either examined the

permittee’s application made to the federal permitting

agency and bases its certification upon water quality

related information contained in the application, or has

examined other information furnished by the permittee

so as to allow the certifying agency to state with reason-

able assurance that the permit’s terms will comply with

State water quality standards. 778 P.2d at 1132. (App.

10-11) In addition, the court took note of 40 C.FR.

§ 124.53(e)(3) which requires that the State’s certification

of an NPDES permit be in writing and include a “state-

ment of the extent to which each condition of the draft

permit can be made less stringent without violating the

requirements of State law, including water quality stan-

dards.” See 778 P.2d at 1132. (App. 11-12) Despite the

above C.F.R. provisions, the court concluded that the

Clean Water Act does not require States to certify NPDES

permits on an individual, case-by-case basis:

These provisions, particularly the require-

ments of 40 C.FR. § 121.2(a)(2), indicate that

site-specific matters may be important consider-

ations in the certification process. However, we

do not believe that the federal regulations

implementing the Clean Water Act can be read

to require states to certify draft NPDES permits

on a case-by-case basis.

Id. (App. 12) Beyond providing for reasonable assurance

that individual permittees will comply with State water

quality standards, the regulations were viewed by the

court as being “virtually silent as to what procedures

states should employ in certifying draft NPDES permits.”

Id. at 1132-33. (App. 12)

The Alaska Supreme Court also considered, but dis-

missed summarily, the observation of a federal district

court that water quality based effluent limitations must

be based upon site-specific examination of the pertinent

water body:

No reported cases have considered whether

states must certify NPDES permits on an indi-

vidual rather than a group basis, although a

federal district court has noted in dictum that

“effluent limitations are established by individ-

ual examination of the waterway.” Homestake

Mining Co. v. United States Envtl. Protection

Agency, 477 F.Supp. 1279, 1286 (D.S.D. 1979)

(court paraphrasing an EPA General Counsel’s

decision).

778 P.2d at 1133. (App. 13) The Homestake court’s observa-

tion was discussed no further. Yet, consistent with the

Homestake decision, the Alaska Supreme Court added that

“Alaska water quality standards apply to individual dis-

chargers, not to industries or groups considered as a

whole.” 778 P.2d at 1133 n.11 (emphasis added).

(App. 14)

In the end, the Alaska Supreme Court based its con-

clusion upon general statements contained in the legisla-

tive history of the Clean Water Act. The court reasoned

that since the legislative history of the Act suggests that

States are to play a large role in regulating potential

polluters and since (in the court’s view) “the Clean Water

Act and its implementing regulations[] lack . . . specific

requirements governing states’ NPDES certification pro-

cedures,” the Alaska DEC was not required to certify the

NPDES permits on an individual, case-by-case basis and

could instead certify the permits on a group basis. 778

P.2d at 1133-34. (App. 14-15) The court added that the

mass certification was thus reasonable since it might be

difficult for DEC to conduct the requisite site-specific

evaluations. 778 P.2d at 1134 n.11. (App. 15)

With respect to Petitioner’s argument that by failing

to certify within the 60-day period prescribed by law, the

State had waived any right it had to certify (App. 129-32),

the Alaska Supreme Court did little more than take note

of the fact that the State could waive its right to certify, in

which case “the NPDES permits are issued as originally

proposed by EPA.” 778 P.2d at 1129, 1135 (citing the 60-

day waiver requirement). (App. 3, 17-18) Petitioner’s

waiver argument was then disposed of by the court at the

end of its opinion. “We have reviewed all of the remain-

ing specifications of errors which have been advanced by

TFA, NAEC, and MAC and have concluded that they are

without merit.” 778 P.2d at 1140. (App. 31) Petitioner’s

argument that the State had modified the settleable solids

effluent in the 446 NPDES permits without the notice and

hearing required by law (App. 127-28, 132), suffered a

similar fate.

With respect to Petitioner’s argument that the

0.2m1/1 settleable solids effluent was overly stringent and

arbitrary so as to effect a taking of property (App.

133-36), the Alaska Supreme Court noted Petitioner’s

contention. 778 P.2d at 1135. (App. 19) The court, how-

ever, gave the argument short shrift and concluded that

in view of the facts and circumstances, the 0.2m1/1 limita-

tion was a reasonable exercise of the State’s regulatory

power. 778 P.2d at 1135-37. (App. 18-23)

As pointed out to the Alaska Supreme Court on

petition for rehearing, in the aftermath of the mass certi-

fication, Petitioner MAC members and other miners have

endured a host of problems, both administratively and in

the court system. (App. 74-75, 81-82, 84-88) Since EPA is

but an “interested observer” of the certification process,

Marathon Oil Co. v. E.P.A., 830 F.2d 1346, 1351 (Sth Cir.

1987), and since absent the required State statements, EPA

has no authority to determine whether the limitations

certified by the State are more stringent than required to

meet State water quality standards, Roosevelt Campobello

International Park Commission v. E.P.A., 684 F.2d 1041, 1056

(1st Cir. 1982); Lake Erie Alliance v. U.S. Corps of Engineers,

526 FSupp. 1063, 1074 (W.D.Pa. 1981), affirmed 707 F.2d

1392 (3rd Cir. 1983), cert. denied, 464 U.S. 915 (1983), when

miners have attempted to obtain EPA evidentiary hear-

ings on the extent to which their effluent limits could be

relaxed as to settleable solids, turbidity, and arsenic, the

miners have struck a brick wall. (App. 142-43) These

ongoing evidentiary hearings are presently pending

before EPA (App. 82, 85-88), and their result is directly

contingent upon the validity or invalidity of the State’s

certification. 40 C.F.R. § 124.55(b). Moreover, the State’s

mass certification practice shows no signs of stopping.

778 P.2d at 1130 n.7. (App. 6-7)

As noted, the State’s mass certification has also

resulted in numerous miners being brought before the

federal district court. (App. 81-82, 84-85) In one suit in

particular, EPA has charged one miner and her husband,

who have mined together for nearly 30 years, with

numerous violations of their 1985 NPDES permit, all but

one of which relates to the 0.2m1/1 settleable solids efflu-

ent limitation incorporated into their modified permit as

a result of State certification. (App. 81-82)

As such, the two (both MAC members), and other miners

as well, face the exaction of severe penalties, civil, crimi-

nal and administrative, as a result of the State’s illegal

certification. See 33 U.S.C. §§ 1319, 1365.

sé.

REASONS FOR GRANTING THE WRIT

Petitioner submits that the Alaska Supreme Court

has decided significant federal questions in a way which

is in direct conflict not only with the decisions of various

federal courts of appeal, but also with applicable deci-

sions of this Court. Even if these conflicts did not exist,

the Alaska Supreme Court has decided important ques-

tions of federal law concerning the scope and administra-

tion of a major environmental statute and the relation

between the statute and the property and liberty rights of

individuals. Given the broad applicability of the Clean

Water Act, with tens of thousands of NPDES permits

being issued nationwide, if Alaska remains unchecked in

its error, the practice of mass certification and the inclu-

sion of overly-stringent water quality based effluent lim-

itations in NPDES permits is bound to work its way

south, if it has not already. Moreover, in the wake of the

State’s certification, the number of miners in Alaska has

decreased dramatically. The potential for such economic

dislocations spreading elsewhere in the Nation militates

strongly in favor of this Court’s checking the State’s

practice in its incipient stage. Under Supreme Court Rule

17.1(b)-(c), these special and important reasons well war-

rant this Court’s granting review via writ of certiorari.

Petitioner will address these reasons concisely below.

THE STATE MUST CERTIFY WATER QUAL-

ITY BASED EFFLUENT LIMITATIONS ON

AN INDIVIDUAL, CASE-BY-CASE BASIS.

Initially, Petitioner submits that the Alaska Supreme

Court is simply wrong in its conclusion that the Clean

Water Act and its implementing regulations do not

require individual, case-by-case consideration when the

State is certifying an NPDES permit. 40 C.F.R.

§ 121.2(a)(2) specifically requires individual, site-specific

consideration of an NPDES permittee’s application. Fur-

thermore, it is difficult to imagine how the State can

provide the statement required by 40 C.F.R. § 124.53(e)(3),

a “statement of the extent to which each condition of the

draft permit can be made less stringent without violating

the requirements of State law, including water quality

standards,” without giving individual consideration to a

permittee’s application.

In Marathon Oil, supra, the Fifth Circuit specifically

criticized the Alaska DEC’s misunderstanding of 40

C.F.R. § 124.53(e)(3), and pointed out DEC’s error. In that

case DEC, oddly enough, certified an NPDES permit indi-

vidually, on a very site-specific basis. See 830 F.2d at

1349-53. During the course of its opinion, the Court of

Appeals on several occasions noted that DEC labored

under the erroneous view that it could not specify condi-

tions less stringent than those contained in the draft

permit. Jd. at 1351 & n.26, 1352 & n.35, 1353. Yet, in a

schizophrenic burst DEC did include in its certification a

boiler plate § 124.53(e)(3) statement that the draft permit

“cannot be made less stringent without violating the require-

ments of Alaska state law and regulations including Alaska

water quality standards.” 830 F.2d at 1353 (quoting DEC’s

cover letter accompanying its Certificate of Reasonable

Assurance) (emphasis supplied by the court).

When EPA promulgated 40 C.FR. § 124.53(e)(3), the

Administrator explained the purpose of the provision

and that it does indeed mean what it says:

Some problems have resulted from the prac-

tice of certifying draft permits, which practice

has arisen from the practical difficulties of certi-

fying applications. In particular, certifications

have not always clearly stated exactly what con-

ditions are necessary to comply with State law

and whether less stringent conditions would

also satisfy State law. The final regulations rem-

edy these problems by requiring States to set

forth in all cases the minimum terms and condi-

tions which will be necessary to comply with

applicable law. For example, if a State certifies a

permit with an effluent limitation imposing a

daily maximum BOD of 25mg/I, it will be

required to identify also a ceiling representing

the minimum level of contrel, such as 30mg/1 or

40mg/1, which the State finds necessary to com-

ply with State law.

44 Fed. Reg. 32880 (emphasis added). EPA recognized the

burden this procedure places upon States, but found any

alternative to be unacceptable. /d.

The State of Alaska’s mass certification of NPDES

permits is directly contrary to the Clean Water Act’s

conception of the NPDES permitting process as one

involving individual, adjudicatory determinations. In Sea-

coast Anti-Pollution League v. Costle, 527 F.2d 872 (1st Cir.

1978), cert. denied, 439 U.S. 824 (1978), the Court of

Appeals explained that the NPDES permitting process is

by nature an adjudicatory one; its purpose is to determine

facts in particular cases, not to promulgate policy-type

rules or standards. 572 F.2d at 876. In Marathon Oil Co. v.

E.P.A., 564 F.2d 1253 (9th Cir. 1977), that Court of Appeals

made similar observations. In contrast to other proceed-

ings under the Clean Water Act, which provide for the

promulgating of technology based effluent limitations, the

NPDES permitting process itself focuses on the adjudica-

tory application of particular effluent limitations to indi-

vidual permittees; it is not designed for the promulgating

of policy-type rules or standards. 564 F.2d at 1262. In

opposition, the State has turned the permitting process

on its head by failing to certify on an individual basis,

and instead improperly promulgating a policy-type rule,

a 0.2ml1/1 settleable solids limitation which it inserted in

each and every one of the 539 NPDES permits.

The State’s failure to certify on an individual basis is

particularly noteworthy since it involves the imposition

of a water quality based effluent limitation, as opposed to

a technology based one. In E.P.A. v. California ex rel. State

Water Resources Control Board, 426 U.S. 200 (1976), Justice

White clearly explained that while technology based

effluent limitations may be imposed on an industry-wide

or group basis, water quality based effluent limitations

must be the result of individualized consideration of the

receiving waters and the situation of the permittee:

Congress contemplated that there may be

some States, which would elect not to develop

an NPDES program but would nonetheless

determine — as § 510 permits - to adopt water

quality standards or other limitations stricter

than those EPA itself has promulgated and

would otherwise apply. This being the case,

Congress must have contemplated that the EPA

was capable of issuing permits in that State

. . . and of enforcing those stricter standards.

Some of those standards - in fact all but those

pegged to the quality of the receiving waters — could

be translated into permit conditions for each

discharger without coordinating the conditions

in the other permits, because the effluent limita-

tions in the Amendments are technology based

and the timetable by which compliance is to be

achieved is not made to depend on the perfor-

mance of other dischargers. Other standards, pri-

marily those involving water quality standards,

would require coordination among the permit condi-

tions of numerous pollutors . . . and it is evident that

Congress contemplated that the EPA was capable of

carrying out this function as well.

426 U.S. at 219-20 (emphasis added).

The clear wording of the relevant provision of the

Act is that water quality based effluent limitations must

be “necessary to meet water quality standards.” 33 U.S.C.

§ 1311(b)(1)(c) (emphasis added). The use of the words

“necessary” and “meet” in this context requires an indi-

vidual, site-specific determination of the necessity for a

given water quality based effluent limitation. As such, the

Act does not provide broad license to regulate in the

name of water quality. The power to impose a water

quality based effluent limitation is circumscribed by the

necessity for the limitation being as stringent as it is. Cf.

Natural Resources Defense Council v. E.P.A., 273 U.S. App.

D.C. 240, 859 F.2d 156, 208 (1988).

In sum, the State’s mass certification practice contra-

venes the NPDES permitting process as envisioned in the

Clean Water Act and its implementing regulations. The

Alaska Supreme Court’s decision in this respect is in

direct conflict with the provisions of the Act as construed

by this Court and federal courts of appeal. Given the

thousands of NPDES permit certifications which have

occurred under the Clean Water Act, this case stands

alone as the sole reported decision involving a mass

certification. As the Chief Justice observed in another

context, the unprecedented nature of the State’s mass

certification attests not to its correctness but to its error.

Leo Sheep Co. v. United States, 440 U.S. 668, 686 (1979). “It

is some testament to common sense that the present case

is virtually unprecedented.” Id.

Il.

BY FAILING TO CERTIFY WITHIN THE 60-

DAY PERIOD PRESCRIBED BY LAW, THE

STATE WAIVED ANY RIGHT TO CERTIFY

THE NPDES PERMITS.

The purpose behind the time requirement in the cer-

tification process is to protect the permittee so that his

application is not frustrated by State delay. House Report

No. 92-911 at 122 (March 11, 1972) (1972 House Report).

When EPA promulgated 40 C.F.R. § 124.53, the Adminis-

trator accordingly explained:

Many commenters objected to the delays

caused by the State certification process in the

NPDES program. Specifically they thought that

the provision in the proposal for potentially

allowing a State one year to certify was uncon-

scionable. In response to those comments the

regulations have been modified so that the right

to certify will be deemed waived unless exer-

cised within a specified reasonable time which

shall not exceed 60 days unless the Regional

Administrator finds that unusual circumstances

require a longer time.

44 Fed. Reg. 32880 (emphasis in original).

Under 40 C.FR. § 124.53(c)(3), EPA may, of course,

advise the State that it will have less than 60 days in

which to certify. 42 Fed. Reg. 37115. For the State to

exceed the 60 days, however, the State must first notify

EPA in writing that more time is needed for evaluating the

permit. Id. EPA is not required to grant such a request. /d.

In this case there is no evidence whatsoever that the

State requested by any means, much less in writing, an

extension of the certification period or that EPA granted

this imaginary request. Where, as here, the State fails to

certify within the prescribed period, “then the certifica-

tion requirement is waived.” 1972 House Report at 122

(emphasis added). In the words of the Act, “[iJf the

State . . . refuses to act on a request for certification

within [the prescribed] period of time . . . after receipt of

such request, the certification requirements of this sub-

section shall be waived with respect to such federal appli-

cation.” 33 U.S.C. § 1341(a)(1) (emphasis added); see 40

C.F.R. § 124.53(d). If the State fails to certify within a

required time, waiver is automatic. Environmental Defense

Fund v. Alexander, 501 F.Supp. 742, 771 (N.D.Miss. 1980),

affirmed in part, reversed in part on other grounds, 651 F.2d

983 (5th Cir. 1981), on remand, 554 F.Supp. 451 (N.D.Miss.

1981).

During the case, the State’s arguments have boiled

down to asserting that since EPA accepted the State’s

untimely certification, any challenge to the timeliness of

the State’s certification must be brought before EPA.

<i i,

What the State’s position ignores is that the 1972 CWA

Amendments were crafted to give EPA no authority to

review the propriety of the State’s certification. 1972

House Report at 124. As to certification, EPA can do no

more than perform services of a technical nature, and

even then only upon the State’s request. Id. Therefore,

“EPA has no authority to ignore the State certification,”

Roosevelt Campobello, supra, 684 F.2d at 1056, and cannot

“look behind” the certification, “beyond the bare inquiry

as to whether the certification is affixed to the permit.”

Town of Sutton v. Water Supply and Pollution Control Com-

mission, 116 N.H. 154, 355 A.2d 867, 870 (1976). As noted

previously, EPA is merely an “interested observer” of the

certification process. Marathon Oil, supra, 830 E.2d at 1351.

Very recently, this Court considered another 60-day

requirement in an environmental statute. Hallstrom v.

Tillamook County, __ U.S. __, 58 U.S.L.W. 4007 (1989).

This Court affirmed that absent a strong reason for giving

such a time requirement a flexible or pragmatic construc-

tion, the requirement should be enforced according to its

literal meaning. 58 U.S.L.W. at 4009-10. Here there can be

no strong reason for disregarding the 60-day requirement

and allowing the State’s 88-day certification to stand; the

purpose of the time requirement itself is to protect the permit-

tee. 1972 House Report at 122; 44 Fed. Reg. 32880. As

Justice O’Connor observed, “[t]he language of this provi-

sion could not be clearer.” Hallstrom, 58 U.S.L.W. at 4009.

The requirement is not “may” but mandatory. Once the

60-day period lapsed, the State was without jurisdiction

to certify the NPDES permits.

Ill.

THE STATE ILLEGALLY INSERTED THE

0.2ML/L SETTLEABLE SOLIDS EFFLUENT

LIMITATION IN THE 446 NPDES PERMITS

WHICH EPA PROPOSED TO MODIFY ONLY

WITH RESPECT TO TURBIDITY AND

ARSENIC.

40 C.F.R. § 122.62 provides in relevant part as fol-

lows: “When a permit is modified, only the conditions

subject to modification are reopened.” Concerning the

apparent predecessor to 40 C.F.R. § 122.62, this Court in

Costle v. Pacific Legal Foundation, 445 U.S. 198 (1980),

rehearing denied, 446 U.S. 947 (1980), unanimously

concluded:

We agree with the position advanced by

petitioner that respondents may not reopen con-

sideration of substantive conditions contained

within the 1975 permit through hearing requests

relating to a proposed permit modification that

did not even purport to affect those conditions.

445 U.S. at 217. Contrary to this Court’s conclusion in

Costle, the State, after expressly waiving in 1984 any right

to certify a more stringent settleable solids effluent lim-

itation in the 446 permits, seized upon its opportunity to

certify the EPA-proposed modifications for turbidity and

arsenic as a means to reopen the 1984 permits with

respect to the settleable solids effluent limitation, which

was not among the substantive conditions of the permit

which the proposed modification purported to affect.

Moreover, as a matter of due process, the individual

permittees were entitled to know specifically that the

State was intending to modify the permits with respect to

settleable solids and to be heard individually in response

ia ii

to the proposed modification. United States v. Florida East

Coast Railway Co., 410 U.S. 224, 242-43 (1973). As it was,

miners went to the two public hearings on the proposed

modifications with no idea that the State was intending to

modify their permits with respect to settleable solids, and

accordingly did not submit comments or testify in regard

to a more stringent settleable solids limitation. (App. 81)

The State’s announcement to certain members of the pub-

lic, after the two hearings were history, that the State

intended to certify a 0.2ml/1 settleable solids effluent

limitation for each of the 446 permits (App. 47), does not

suffice to satisfy the central constitutional safeguard of

due process.

IV.

THE STATE EFFECTED A TAKING OF PRI-

VATE PROPERTY IN VIOLATION OF THE

FIFTH AND FOURTEENTH AMENDMENTS

BY CERTIFYING THE SAME WATER QUAL-

ITY BASED EFFLUENT LIMITATION FOR

SEVERAL HUNDRED PERMITS WITHOUT

DEMONSTRATING THAT SUCH A STRIN-

GENT LIMITATION IS NECESSARY TO

MEET STATE WATER QUALITY STAN-

DARDS IN EACH INDIVIDUAL CASE.

The mining claims and mineral interests which the

NPDES permits purport to regulate are, of course, prop-

erty rights in the full sense, and thus within the protec-

tion of the Fifth and Fourteenth Amendments’

prohibition against the taking of private property for

public use without just compensation. Best v. Humboldt

Mining Co., 371 U.S. 334, 335 (1963); Union Oil Co. v.

Smith, 249 U.S. 337, 349 (1919). As such, regulation under

the Clean Water Act can effect a taking of a miner’s

property in violation of the Constitution. United States v.

Riverside Bayview Homes, Inc., 474 U.S. 121, 126-27 (1985).

The essential attribute of the right to mine gold is the

ability to exercise that right profitably and subject only to

reasonable government regulation that does not go too

far. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 414-15

(1922). So unique is the property right to mine gold that

where a gold miner, as most do, has a claim for mining

purposes only, if the result of government regulation of

his property is such so as to make it economically unfeas-

ible to mine, his claim is effectively taken from him,

extinguished, and he is left with nothing at all, United

States v. Coleman, 390 U.S. 599, 602-03 (1968), except his

right to just compensation. Pennsylvania Coal, 260 U.S. at

416; see Armstrong v. United States, 364 U.S. 40, 44-48

(1960). Prior to the overly-stringent regulation, however,

his mining claim is by definition a reasonable investment-

backed expectation. Coleman, 390 U.S. at 602-03.

As Justice Brennan explained in Penn Central Trans-

portation Co. v. City of New York, 438 U.S. 104 (1978), one

measure of a violation of the Takings Clause is whether

the government regulation frustrates distinct investment-

backed expectations. Id. at 124-25, 127. In this case, with

respect to the 446 NPDES permittees in particular, they

had every reasonable expectation that their settleable

solids effluent limitation would be the 0.7/1.5 figure, and

had structured their operations accordingly. When the

State then in late April, a few weeks before the short

northern mining season begins, surprised them with the

“unnoticed” settleable solids modification, their distinct

and reasonable investment-backed expectations vanished.

Regardless of the reasonableness of the 0.2m1/1 limitation

itself, the miners were at the very least entitled to fulfill

their distinct, reasonable expectations and to be given

more sufficient time, until the next mining season, to

comply with the surprise limitation. United States v. Locke,

471 U.S. 84, 108 (1985).

Where, as here, a State is conditioning the issuance of

a permit upon compliance with certain restrictions, the

Takings Clause further requires that the restrictions con-

tained in the permit must substantially advance a legiti-

mate State interest and must not single out the permittee,

individually or as part of a distinct group, to bear the

burden of remedying or preventing a problem beyond his

own proportionate causal responsibility. Nollan v. Califor-

nia Coastal Commission, 483 U.S. 825, 834-35 & n.4 (1987);

Pennell v. City of San Jose, ___ U.S. ___, __-__, 108 S.Ct.

849, 861-64, 99 L.Ed.2d 1, 19-22 (1988) (Scalia, J., dissent-

ing). To comply with this constitutional safeguard, the

State must establish a close nexus between the permit

term and any evil the term purports te address. Nollan,

483 U.S. at 837. As Justice Scalia explained in his Pennell

dissent, the burden is on the State to demonstrate the

“cause-and-effect relationship” between the evil which

the permit term seeks to remedy or prevent and the

particular permittee’s property use restricted by the regu-

lation. 108 S.Ct. at 862-63, 99 L.Ed. 2d at 19-21 (Scalia, J.,

dissenting). This burden the State of Alaska did not begin

to meet.

While the evidence was necessarily limited by gov-

ernment intimidation of individual miners through pend-

ing or threatened enforcement actions and by the State’s

failure to conduct the requisite site-specific, case-by-case

certification, the Deciding Officer did make pertinent

findings of fact which were affirmed by the Alaska

Supreme Court. The nature of Alaska’s rivers is such that

they tend naturally to be heavily silted; yet, even the

most heavily silted Alaska rivers, with a few exceptions,

do not have measurable settleable solids. 778 P.2d at 1138.

(App. 26-27) The “no measurable increase,” minimum

detectable limit for settleable solids is 0.1ml/1. 778 P.2d at

1136, 1138. (App. 19, 27) While the 0.2m1/1 settleable

solids effluent limitation applies to the point of effluent

discharge, prior to entry into and dilution by the receiving

water, the 0.1ml/1 water quality standard involves a mea-

surement at a point downstream after the effluent has

been diluted in a mixing zone. 778 P.2d at 1138. (App. 27)

Thus, since dilution ratios of effluent to receiving water

ranging from 1:1 to 1:9 were found to exist at various

sites, and taking such dilution reasonably into account,

the 0.2ml1/1 settleable solids effluent was found, after

dilution, to meet the State water quality standards in such

cases. 778 P.2d at 1135-36, 1138-39. (App. 20-22, 26-27)

That the 0.2ml1/I1 settleable solids effluent will meet

the 0.1m1/1 State water quality standard regardless of the

site specifics, however, is precisely why the 0.2m1/1 per-

mit condition effects a taking of property. On a stream

which has virtually no settleable solids to begin with, the

low-end dilution ratio of 1:1 results in the 0.2m1/1 efflu-

ent being diluted down to the 0.1m1/1 water quality stan-

dard at the point of measurement. In layman’s terms, this

is as if one glass of effluent at 0.2m1/l were mixed with a

glass of river water and thus diluted in half to 0.1ml/1.

Therefore, on a similar stream where the dilution ratio is

instead 1:9, the 0.2m1/1 effluent limitation is severely

over-stringent. Again, in layman’s terms, this is compara-

ble to mixing one glass of effluent with nine glasses from

the river and diluting the effluent accordingly. On such a

stream, a settleable solids effluent of 1.0m1/1 would suf-

fice, after dilution, to meet the State water quality

standard.

The unique facet of the certification process, and of

40 C.F.R. § 124.53(e)(3) in particular, is that it serves as a

prophylactic against just such a Takings Clause violation.

By requiring the State to indicate the necessary nexus, the

cause-and-effect relationship between the pertinent State

water quality standards and the stringency of any water

quality based effluent limitations, 40 C.F.R. § 124.53(e)(3)

(if properly complied with) works to curtail the violation

of constitutional rights. To the contrary, the State of

Alaska’s mass certification practice fails to produce the

necessary nexus between water quality standards and

individual permit conditions, and by producing instead

the 0.2m1/1 settleable solids effluent limitation and other

overly-stringent permit conditions, the State’s practice

amounts to no more than “an out-and-out plan of extor-

tion.” Nollan, 483 U.S. at 837 (quoting J.E.D. Associates,

Inc. v. Atkinson, 121 N.H. 581, 584, 432 A.2d 12, 14-15

(1981)).

The failure of the State’s mass certification practice to

establish the necessary nexus between water quality stan-

dard and effluent limitation “positively militates against

the practice” of mass certification.? Nollan, 483 U.S. at 837

2 If the Act be interpreted differently than Petitioner sug-

gests, supra, at 14-18, so as to allow for mass certification, then

the Act itself suffers from a constitutional deficiency. As such,

if reasonably possible, the Act should be construed narrowly

so as to avoid future taking difficulties. Riverside Bayview

Homes, supra, 474 U.S. at 128 & n.5. In view of this point, 28

U.S.C. § 2403(a) may be applicable.

n.5. In effect, the State’s mass certification of NPDES

permits threatens to lead to a lesser realization of the

State’s purported water quality goals, and encourages

and suggests an impermissible, closed-door accommoda-

tion to benefit a particular interest group. Id.; Pennell, 108

S.Ct. at 863-64, 99 L.Ed. 2d at 21-22 (Scalia, J., dissenting).

(App. 119, 136-37) The Clause, in contrast, serves to

ensure an open, reasoned decision-making process, as a

Constitutional Open Meetings Act of sorts. Pennell, 108

S.Ct. at 863-64, 99 L.Ed. 2d at 21-22 (Scalia, J., dissenting).

Last, the illegality of the State’s certification is fur-

ther borne out by its certifying certain NPDES permits on

an individual, site-specific basis — including stating to

which extent to which permit conditions could be made

less stringent and still comply with State water quality

standards, see Marathon Oil, supra, 830 F.2d at 1352-53 -

while where miners are concerned, singling them out by

lumping them into a pile and certifying their NPDES

permits arbitrarily on a mass basis. See Nollan, 483 U.S. at

835 n.4; cf. Dobbins v. City of Los Angeles, 195 U.S. 223,

239-40 (1904). This practice of mass certification is by its

very nature closed door so as to shut out the individual

permittee from the exact process whereby the conditions

of his existence are being determined.

In short, the burden was on the State to establish the

necessity for the 0.2m1/1 settleable solids effluent limita-

tion in each individual permit; it was not incumbent on a

miner to come forward and prove the contrary. If the

State is then unable to utilize its vast resources (App.

143-46), to meet its burden by performing the requisite

site-specific, case-by-case certification, it must exercise its

option and (as it did in 1984) waive its right to certify

rather than arbitrarily imposing a burden on the individ-

ual permittees. This is but a modern-day application of an

age-old principle. The State “may not, under the guise of

protecting the public interests, arbitrarily interfere with

private business, or impose unusual and unnecessary

restrictions upon lawful occupations.” Lawton v. Steele,

152 U.S. 133, 137 (1894).

CONCLUSION

Within the past year, the wreck of the Exxon Valdez

has focused the eyes of the Nation on Alaska and has

brought environmental concerns to the forefront. Peti-

tioner does not dispute the importance of the environ-

ment to all Americans, but instead submits that when

State and Federal environmental authorities are exercis-

ing the power to regulate persons in their lives and

occupations, those authorities must do so subject to the

precious safeguards embodied in the Constitution and

laws of our Nation. Whatever the necessity, ours remains

a Nation governed by the rule of law, not of men.

For the reasons stated, Petitioner Miners Advocacy

Council prays that the Court grant the petition for writ of

certiorari.

DATED this 14th day of December, 1989, at Fair-

banks, Alaska.

Respectfully submitted,

ROBERT JOHN *

WILLIAM R. SATTERBERG, JR.”

Law Orrices oF WILLIAM R.

SATTERBERG, JR.

709 Fourth Avenue

Fairbanks, Alaska 99701

(907) 452-4454

# Of Counsel

*Counsel of Record for Petitioner

App. 1

APPENDIX A

THE SUPREME COURT OF THE STATE OF ALASKA

MINERS ADVOCACY COUNCIL,

INC.,

Appellant,

STATE OF ALASKA, DEPARTMENT

OF ENVIRONMENTAL

CONSERVATION; TRUSTEES

FOR ALASKA; and NORTHERN

ALASKA ENVIRONMENTAL

CENTER,

Appellees.

TRUSTEES FOR ALASKA and

NORTHERN ALASKA

ENVIRONMENTAL CENTER,

Appellants,

STATE OF ALASKA, DEPARTMENT

OF ENVIRONMENTAL

CONSERVATION; DENNIS D.

KELSO, Commissioner of the

Department of

Environmental Conservation;

and MINERS ADVOCACY

COUNCIL, INC.,

Appellees.

)

Supreme Court

No. S-2369

4FA-85-1690

Civil

OPINION

Supreme Court

No. $-2370

4FA-86-1556

Civil

(No. 3473 - July

28, 1989]

Appeal from the Superior Court of the State of

Alaska, Fourth Judicial District, Fairbanks,

Jay Hodges, Judge.

July 28, 1989.

App. 2

Rehearing Denied Sept. 18, 1989.

William R. Satterberg, Jr., Fairbanks, for Miners

Advocacy Council, Inc.

Patti J. Saunders, Anchorage, and Robert W. Adler,

Washington, D.C., for Trustees for Alaska and Northern

Alaska Environmental Center.

John A. McDonagh, Asst. Atty. Gen., Fairbanks,

Grace Berg Schaible, Atty. Gen., Juneau, for State, Dept.

of Environmental Conservation, and Dennis D. Kelso.

Before MATTHEWS, C.J., and RABINOWITZ,

BURKE, COMPTON and MOORE, JJ.

OPINION

RABINOWITZ, Justice. -

These consolidated appeals raise procedural as well

as substantive challenges to the Alaska Department of

Environmental Conservation’s (DEC) certification of

National Pollution Discharge Elimination System

(NPDES) permits issued to placer gold miners in Alaska

by the United States Environmental Protection Agency

(EPA).

I. BACKGROUND AND PRIOR PROCEEDINGS.

To comply with the federal Clean Water Act,! a per-

son wishing to discharge pollutants into waters of the

' The statute commonly referred to as the Clean Water Act

was originally enacted as the Federal Water Pollution Control

Act Amendments of 1972, Pub.L. No. 92-500, § 2, 86 Stat. 816

(codified as amended at 33 U.S.C. §§ 1251-1387).

App. 3

United States must secure an NPDES permit from EPA.?

EPA may not issue an NPDES permit unless the resulting

discharge will comply with state water quality standards.

33 U.S.C. §§ 1311(b)(1)(C), 1342. Before EPA may issue a

permit, it must also provide the state in which the dis-

charge originates with an opportunity to review the draft

NPDES permit to determine whether the permit’s terms

ensure compliance with the state’s water quality stan-

dards. 33 U.S.C. § 1341(a), (d). A state then has three

options. It may deny certification of the NPDES permit,

thereby precluding EPA from issuing the permit. 33

U.S.C. § 1341(a)(1). The state may waive certification,

thereby removing itself from the permitting process. Id.

Finally, the state may certify the draft permit, and may

include in its certification any conditions more stringent

than those in the draft permit which the state determines

are necessary to comply with state or federal water qual-

ity standards. 33 U.S.C. § 1341(a)(2). EPA must incorpo-

rate more stringent conditions suggested by a state into

the final NPDES permit. Id.

In 1985, EPA notified the State of Alaska that EPA

intended to modify 446 existing NPDES permits issued to

placer gold miners, and to issue 93 new permits for placer

mining operations in the state. The EPA notices clearly

specified that the agency was proposing to issue 539

2 The Clean Water Act prohibits the discharge of any

pollutant. 33 U.S.C. § 1311(a). Notwithstanding this prohibi-

tion, EPA may issue permits to discharge pollutants if the

applicant meets certain specified conditions. See 33 U.S.C.

§ 1342.

App. 4

individual NPDES permits. However, EPA did not pre-

pare and send to the state 446 draft permits and 93 new

draft permits. Instead, EPA sent DEC one draft NPDES

permit to review because EPA intended to grant 539

identical individual permits.* The model draft permit

proposed by EPA contained a settleable solids* effluent

limit® of 1.5 milliliters per liter (ml/1) as an instantaneous

maximum and 0.7 ml/l monthly average. Since EPA

planned to grant identical NPDES permits to every placer

miner who applied for a permit, these settleable solids

standards would have applied to each applicant.

The agency charged with carrying out the NPDES

certification process for the State of Alaska, DEC, also

3 EPA eventually issued 539 individual NPDES permits

identical in all respects except for more lenient turbidity limits

contained in 72 permits, based on site-specific information EPA

received from individual miners.

4 Introduction of settleable solids into streams occurs

when placer miners remove and process overburden in order

to reach gold-bearing gravels. When fine sediment settles to

stream bottoms, it can adversely affect fish spawning areas,

alter water chemistry, and generally reduce the biological pro-

ductivity of the streams. High sediment loads can also adver-

sely affect streams’ value for recreational and subsistence uses.

A 1984 report issued by DEC termed pollution from placer

mining “the largest environmental pollution problem in Alaska

today.” Alaska Dep’t of Envtl. Conservation (Div. of Envtl.

Quality, Water Quality Mgmt. Section), Water Management in

Alaska: 1984 Update 12 (June 1984).

5 An effluent limit sets maximum limits for pollutant con-

centrations in discharges from mining operations. Pollutant

concentrations may be diluted when waste water from mining

operations enters a stream.

App. 5

treated the 539 draft permits for placer mines as a group.

Federal regulations require a state certifying agency to

include in its certification of a draft NPDES permit “[a]

statement that there is a reasonable assurance that the

activity will be conducted in a manner which will not

violate applicable water quality standards.” 40 C.FR.

§ 121.2(a)(3). When it certified the draft NPDES permits,

DEC provided EPA with one such statement applicable to

all 539 permits. However, DEC conditioned its blanket

certification on adoption of a more stringent settleable

solids standard of 0.2 ml/1l, which DEC determined was

necessary to ensure that placer mining operations could

meet state water quality standards. The Alaska water

quality standard for settleable solids is “[n]o increase in

concentrations of sediment, including settleable solids,

above natural conditions.” 18 AAC 70.020. DEC interprets

this standard to mean no measurable increase above nat-

ural conditions. Since standard measuring techniques can

detect settleable solids concentrations down to approx-

imately 0.1 ml/1, a concentration above the natural level

of almost all Alaskan streams, DEC interprets 0.1 ml/1 as

the state water quality standard for settleable solids.

Appellants do not challenge this interpretation.

Given the fact that DEC issued one certification and

statement of reasonable assurance applicable to all 539

draft permits, the 0.2 ml/I limit for settleable solids

applied to every draft permit. In accordance with the

requirements of the Clean Water Act, EPA incorporated

this limit into the final individual NPDES permits the

agency issued to Alaskan placer miners. After EPA issued

the final permits, a number of parties, including the

parties to this appeal and several individual miners, filed

App. 6

timely requests for an administrative adjudication of

DEC’s certification of the draft NPDES permits pursuant

to 18 AAC 15.200. These requests were granted and the

matters consolidated. In addition, Miners Advocacy

Council, Inc. (MAC), filed suit against DEC in superior

court challenging the certification. Trustees for Alaska

(TFA) and Northern Alaska Environmental Center

(NAEC) intervened in the suit. The superior court contin-

ued its proceedings and retained jurisdiction pending a

ruling by the DEC Deciding Officer. After an adjudicatory

hearing, the Deciding Officer upheld DEC’s certification.

TFA, NAEC, and MAC appealed this decision to the

superior court, which affirmed the Deciding Officer’s

conclusions. These consolidated appeals followed.’

6 This section of the Alaska Administrative Code allows

any person to request an adjudicatory hearing pertaining to

DEC decisions concerning NPDES certifications, as well as

other decisions on water quality related permits and variances.

7 Federal regulations implementing the Clean Water Act

require EPA to issue NPDES permits for a fixed time period not

to exceed five years. 40 C.F.R. § 122.46(a). The 539 NPDES

permits at issue in this case, which EPA issued in 1985, expired

on December 31, 1986.

In 1986, EPA issued an additional 104 NPDES permits to

placer miners. These permits also expired on December 31,

1986. DEC certified these permits as a group, just as it did with

the permits involved in the instant litigation. The permits

issued in 1986 differed in one significant respect from those

issued in 1985. When EPA submitted the 1985 permits in draft

form to DEC for certification, the permits contained a settleable

solids effluent limit of 1.5 ml/Il as an instantaneous maximum

and 0.7 ml/l as a monthly average. EPA reduced this limit to

0.2 ml/l in the final permits because DEC made the reduction a

(Continued on following page)

i“

Sl eine Deed Cie a ek

App. 7

(Continued from previous page)

condition of its certification. However, when EPA sent draft

permits to DEC for certification in 1986, the permits already

contained a settleable solids effluent limit of 0.2 ml/Il. DEC

therefore certified the permits without conditioning its certi-

fication on adoption of more stringent limits on settleable

solids.

In 1987 and 1988, EPA issued a total of 367 NPDES permits

to placer miners in three separate groups. These permits all

expired on December 31, 1988. Like the 1986 permits, those

issued in 1987 and 1988 already contained a 0.2 ml/1 effluent

limit on settleable solids when EPA sent the permits in draft

form to DEC for certification. DEC certified the three groups of

permits with three blanket certifications.

Under the series of events described above, we are of the

view that the primary issue raised in this appeal by TFA and

NAEC is not moot. These appellants argue that DEC’s certifica-

tion of the disputed NPDES permits was unlawful because the

0.2 ml/I settleable solids effluent limit contained within the

permits does not ensure compliance with Alaska water quality

standards. Since DEC has continued to certify NPDES permits

containing a 0.2 ml/1 settleable solids effluent limit, whether

this limit ensures compliance with state standards remains an

issue in controversy. It is irrelevant whether the 0.2 ml/I limit

was set by DEC, as occurred with the 1985 permits, or whether

EPA set the limit, as has happened since 1985. Regardless of

which agency actually sets the final effluent limit, both federal

and DEC regulations require that DEC certify only those draft

NPDES permits which ensure that the permitted activities will

not violate state water quality standards. Federal regulations

require a state to include with its certification a statement that

there is reasonable assurance that the permitted activity will

not violate state water quality standards. 40 C.F.R.

§ 121.2(a)(3). DEC regulations, which prohibit activities which

would vioiate state water quality standards, implicitly require

DEC to certify only those permits which insure compliance

with state standards. See 18 AAC 70.010.

App. 8

II. MAY DEC CERTIFY DRAFT NPDES PERMITS FOR

PLACER MINES AS A GROUP RATHER THAN

INDIVIDUALLY?

We must first decide whether DEC may certify all 539

draft NPDES permits for placer mining activities as a

group rather than on a case-by-case basis. DEC readily

admits that it neither performed site-specific evaluations

nor considered information contained in individual

NPDES permit applications® in its certification process.

DEC argues that case-by-case certification of all 539

placer mining NPDES permits is economically and

administratively infeasible, and would provide less

assurance of compliance with state water quality stan-

dards than the agency’s group certification approach.

TFA and NAEC concede that the state’s blanket certifica-

tion is valid as long as it ensures that no individual

permit holder will violate state water quality standards.?

8 In a hearing before the Deciding Officer, DEC Water Quality

Section Chief Randolph Bayliss admitted that, to his knowledge,

DEC did not review information provided by individual applicants

“during the certification period for [the] purpose of certification.”

DEC maintains that virtually all information submitted by individ-

ual miners applying for NPDES permits is insufficient and unreli-

able, and is therefore useless.

9 In their brief, TFA and NAEC state the following:

Nor is DEC prohibited from issuing a blanket, state-

wide certification, based on considerations of admin-

istrative feasibility, as long as the result is

compliance with water quality standards at all loca-

tions, which would require an effluent limit of 0.1

ml/1 for settleable solids. [Emphasis in original.]

This concession vitiates TFA and NAEC’s argument that

DEC is required by law to certify NPDES permits on a case-by-

case basis.

App. 9

MAC, on the other hand, contends that both federal law

and DEC regulations require site-specific certification on

a case-by-case basis. In a related claim, MAC argues that

DEC’s group certification is invalid because the 0.2 ml/1

settleable solids effluent limit incorporated into every

NPDES permit as a result of the certification constitutes a

regulation which was not adopted according to the

requirements of Alaska’s Administrative Procedure Act.

At the administrative adjudication hearing, the DEC

Deciding Officer expressly refused to decide whether

DEC’s group certification was “correct in its approach.”

The superior court, however, held that “[iJn light of eco-

nomic and practical considerations, there is a reasonable

basis to have a blanket certification for all 539 permits

since any interested party may come in on a site-by-site

basis and request a review.” Both the Deciding Officer

and the superior court concluded that DEC’s imposition

of the 0.2 ml/I settleable solids effluent limit on all

NPDES permit applicants by means of the agency’s blan-

ket certification did not constitute a regulation.

We must first determine what standard of review to

apply to this question. While DEC’s knowledge and expe-

rience may be important factors in deciding as a practical

matter whether to carry out NPDES permit certifications

on a group or site-specific basis, the agency’s expertise is

irrelevant to the question of whether blanket certification

is legally permissible. Whether the federal Clean Water

Act and DEC regulations require the state to certify

NPDES permits on an individual, site-specific basis or

allow the state to issue a blanket certification covering

many individual permits without performing site-specific

evaluations is a question of law, which this court reviews

App. 10

under the “substitution of judgment” standard. See Earth

Resources Co. of Alaska v. State, Dep't of Revenue, 665 P.2d

960, 965 (Alaska 1983) (citing Kelly v. Zamarello, 486 P.2d

906, 916 (Alaska 1971)).

This brings us to consideration of MAC’s contention

that federal law requires DEC to certify NPDES permits

individually using site-specific information. The Clean

Water Act itself is silent as to this issue. The federal

statute simply provides that “any applicant” for a permit

must obtain certification from the state in which the

discharge originates or will originate that, inter alia, the

discharge will comply with state water quality standards.

See 33 U.S.C. §§ 1313, 1341(a)(1). The Act also requires

that state certifications “set forth [conditions] . . . and

monitoring requirements necessary to assure that any

applicant for a Federal license or permit will comply with

any applicable effluent limitations and other limitations.”

33 U.S.C. § 1341(d). While these provisions unam-

biguously require states certifying draft permits to pro-

vide assurance that every NPDES permit applicant will

meet state water quality standards, they do not preclude

certification of several permits as a group.

Similarly, federal regulations implementing the Clean

Water Act do not specifically address whether states may

issue one blanket certification for a number of NPDES

permits. Regulations governing state certification of fed-

eral licenses and permits to conduct any activity which

may result in discharges into waters of the United States

require state certifications to include the following:

A statement that the certifying agency has

either (i) examined the application made by the

applicant to the licensing or permitting agency

App. 11

(specifically identifying the number or code

affixed to such application) and bases its certi-

fication upon an evaluation of the information

contained in such application which is relevant

to water quality considerations, or (ii) examined

other information furnished by the applicant

sufficient to permit the certifying agency to

make the statement [of reasonable assurance of

compliance with state standards] described in

paragraph (a)(3) of this section.

40 C.F.R. § 121.2(a)(2). Additionally, regulations dealing

specifically with state certification of NPDES permits

require such certifications to be in writing and include:

(1) Conditions which are necessary to

assure compliance with the applicable provi-

sions of CWA [Clean Water Act] sections 208(e),

301, 302, 303, 306, and 307 and with appropriate

requirements of State law;

(2) When the State certifies a draft permit

instead of a permit application, any conditions

more stringent than those in the draft permit

which the State finds necessary to meet the

requirements listed in paragraph (e)(1) of this

section. For each more stringent condition, the

certifying State agency shall cite the CWA or

State law references upon which that condition

is based. Failure to provide such a citation

waives the right to certify with respect to that

condition; and

(3) A statement of the extent to which each

condition of the draft permit can be made less

stringent without violating the requirements of

State law, including water quality standards.

Failure to provide this statement for any condi-

tion waives the right to certify or object to any

less stringent condition which may be estab-

lished during the EPA permit issuance process.

App. 12

40 C.FR. § 124.53(e). These provisions, particularly the

requirements of 40 C.F.R. § 121.2(a)(2), indicate that site-

specific matters may be important considerations in the

certification process. However, we do not believe that the

federal regulations implementing the Clean Water Act

can be read to require states to certify draft NPDES

permits on a case-by-case basis. Like the statute itself, the

primary thrust of the regulations appears to be to ensure

that states certify only those draft permits which provide

assurance that individual permittees will comply with

state water quality standards. Beyond that, the federal

regulations are virtually silent as to what procedures

states should employ in certifying draft NPDES permits.

Regulations promulgated by DEC governing its

NPDES permit certification procedure also do not specifi-

cally address whether the agency must consider each

draft NPDES permit separately. The regulations (i) simply

require NPDES permit applicants to furnish the agency

with copies of applications and supplementary informa-

tion which applicants must submit to EPA, and (ii) autho-

rize DEC to request further information.!°©

10 Department of Environmental Conservation regulations

provide:

NPDES CERTIFICATION PROCEDURE (a) Contem-

poraneous with the filing of an application for an

NPDES permit, or for a modification or reissuance of

an NPDES permit, with EPA, a copy of the applica-

tion and all supporting information, together with a

cover letter requesting certification, must be served

on the central office of the department. If the certi-

fication request involves a modification to an NPDES

(Continued on following page)

App. 13

No reported cases have considered whether states must

certify NPDES permits on an individual rather than a group

basis, although a federal district court has noted in dictum

that “effluent liznitations are established by individual exam-

ination of the waterway.” Homestake Mining Co. v. United

States Envtl. Protection Agency, 477 F.Supp. 1279, 1286

(D.S.D.1979) (court paraphrasing an EPA General Counsel's

decision).

(Continued from previous page)

permit which does not involve application, for which

EPA does not intend to issue public notice, the

department will require a copy of the proposed mod-

ification at least 60 days before any deadline estab-

lished by EPA for certification action on the

modification, or 60 days before the proposed effec-

tive date of the modification, whichever is the

sooner. All supplementary forms or other informa-

tion pertaining to the application must be served on

the central office of the department at the time of

their filing with EPA.

(b) Within 30 days after receipt of an applica-

tion for certification, the department will, if neces-

sary, serve notice upon the applicant that additional

information is necessary in order for the department

to determine whether the discharge will comply with

the applicable provisions of secs. 301, 302, 303, 306

and 307 of the FWPCA [Federal Water Pollution

Control Act], and that the additional information

must be served upon the department within 30 days

after receipt of the request. If the information is not

served upon the department within the time period

specified, certification will be denied.

18 AAC 15.130. In addition, DEC regulations also provide for

public notice and hearings on NPDES permit certifications, as

well as specify the timetable and required form for the final

certification decision. See 18 AAC 15.140-.170.

App. 14

In the absence of any statutory or regulatory require-

ment that DEC certify draft NPDES permits on an indi-

vidual basis, we conclude that DEC may issue a blanket

certification for draft NPDES permits covering a number

of permittees, provided the certification ensures that

Alaska water quality standards will be met.'! The Legis-

lative history of the Clear. Water Act, which reveals that

Congress intended to give states broad power and discre-

tion in the fight against water pollution, bolsters the

conclusion that states have discretion to certify NPDES

permits on a group basis if they choose to do so. For

example, the Senate Report accompanying the 1972

amendments to the Clean Water Act provides that “(t]he

States shall lead the national effort to prevent, control

and abate water pollution. As a corollary, the Federal role

has been limited to support of, and assistance to, the

States.” S.Rep. No. 414, 92d Cong., 2d Sess., reprinted in

1972 U.S.Code Cong. & Admin.News 3668, 3669. Specifi-

cally discussing the NPDES certification process, the fed-

eral district court in Mobil Oil Corp. v. Kelley, 426 F.Supp.

230 (S.D.Ala. 1976), noted:

A review of the legislative history of the [Clean

Water Act] reinforces the plain meaning of the

Act itself to the effect that Congress intended

the states to play a paramount role in the certi-

fication of potential polluters.

'! Alaska water quality standards apply to individual dis-

chargers, not to industries or groups considered as a whole; 18

AAC 70.010(a) provides that “[n]o person may conduct an

operation that causes or contributes to a violation of the water

quality standards set by this chapter.”

Di iaaietaesetatneeenaiteierataiienas mace tinaiiaiimanaaanesiiiiil

App. 15

Id. at 234. Additionally, the Clean Water Act and its

implementing regulations’ lack of specific requirements

governing states’ NPDES certification procedures pro-

vides further evidence that Congress and the federal

executive branch intended to leave these procedures to

the states’ discretion. Since DEC regulations also do not

explicitly mandate case-by-case certification, we reject

MAC’s contention that DEC is legally obligated to certify

draft NPDES permits on an individual rather than group

basis. 12

III. DOES DEC’S IMPOSITION OF A 0.2 ML/L EFFLU-

ENT LIMIT FOR SETTLEABLE SOLIDS ON ALL

PLACER MINING OPERATIONS THROUGH DEC’S

BLANKET NPDES PERMIT CERTIFICATION CON-

STITUTE AN IMPROPERLY PROMULGATED

REGULATION?

MAC specifies as error the rejection of its contention

that the 0.2 ml/1 effluent limit for settleable solids which

was certified by the State of Alaska for the 1985 NPDES

12 In its resolution of this issue the superior court con-

cluded that

there is a reasonable basis for DEC’s determination

that .2 ml/I will comply with state water quality

standards. It was reasonable for DEC to make a

blanket determination in light of the economic and

practical considerations of making a site-by-site

determination. As stated above, if an interest group

feels that a specific location will not meet water

quality standards with a .2 ml/I effluent limitation,

they have the opportunity to present evidence at a

hearing and persuade DEC to change the effluent

limitation at a particular site. -

App. 16

placer mining permits constitutes an illegally promul-

gated regulation. MAC’s contention is that if the 0.2 ml/1

effluent limit is a regulation, then it is invalid because the

State of Alaska did not comply with the statutory require-

ments for enactment of a regulation when it adopted this

standard.'%

In our opinion, events since the issuance of the 1985

NPDES permits have rendered this issue moot. As noted

earlier in this opinion, see supra note 7, the 539 NPDES

permits at issue in this case expired on December 31,

13 The DEC Deciding Officer concluded that the 0.2 ml/1

effluent limit for settleable solids which was certified by the

State of Alaska was not a regulation. The Deciding Officer

reasoned in part that the State had not promulgated a standard

of general application. “Rather, the State was involved in a

permitting action which pertained to particular 1985 permits

for particular miners.” The Deciding Officer further stated in

his decision that to require certification actions by the State to

comply with the time-consuming procedures for enactment of

a regulation would render the certification actions incapable of

being performed in a time-frame even approaching that set

forth in the EPA and State regulations.

On appeal, the superior court rejected MAC’s illegally-

promulgated-regulation argument, reasoning in part as

follows:

Here as in State v. Northern Bus Co., Inc., 693 P.2d 319,

323 (Alaska 1984), there is a sufficient regulatory

scheme to permit DEC to adjudicate all the permits.

The .2 ml/I effluent limit is an adjudication rather

than legislation. Although the .2 ml/! effluent limit

applies to a number of permits, it is an adjudication;

an interpretation of existing regulations rather than

promulgation of a regulation. Therefore, the Decid-

ing Officer’s ruling that the .2 ml/1 effluent limit is

not a regulation is AFFIRMED.

App. 17

1986. All of the NPDES permits which the EPA issued in

1986, 1987, and 1988 already contained a 0.2 ml/] effluent

limit on settleable solids at the time EPA sent the permits

in draft form to DEC for certification. DEC certified the

three groups of permits with three blanket certifications.

As to the NPDES permits which were issued in 1986,

1987, and 1988, DEC simply certified the NPDES permits

as proposed by EPA without imposing more stringent

conditions than those set out in the draft permits. These

certifications by DEC did not constitute the promulgation

of de facto regulations.

In regard to the 1985 group certification by DEC, it

was DEC, not EPA, which imposed the 0.2 ml/1 settleable

solids effluent limit on placer miners through its certifica-

tion of the NPDES permits. DEC made its 1985 NPDES

certification contingent on imposition of a more stringent

effluent limit on settleable solids than the limit originally

proposed by EPA. The Clean Water Act required EPA to

incorporate the stricter limits cited by DEC into its final

NPDES permits. See 33 U.S.C. § 1341(d). Therefore, the 0.2

ml/1 limit was attributable to action by DEC, and this

action was arguably regulatory in nature.

In contrast to the 1985 NPDES permits, the 0.2 ml/1

effluent limit on settleable solids in subsequent permits is

attributable to action by EPA. After 1985, the 0.2 ml/1

limit was already contained in draft NPDES permits

when EPA sent the permits to DEC for certification. States

are powerless to alter draft NPDES permits during the

certification process, except to make permit conditions

more stringent. See 33 U.S.C. § 1341(d); 40 C.F.R.

§ 124.55(c). If a state does nothing, it waives certification,

and the NPDES permits are issued as originally proposed

App. 18

by EPA. See 40 C.F.R. § 124.53(c)(3). Therefore, DEC effec-

tively had nothing to do with imposing the 0.2 ml/1 limit

on placer mining operations after its 1985 certification,

even though it continued to certify NPDES permits con-

taining the 0.2 ml/1 limit on a group basis. MAC’s claim

that DEC violated Alaska’s Administrative Procedure

Act, AS 44.62.010-44.62.650, when it adopted a de facto

regulation by imposing the 0.2 ml/1 limit on placer min-

ers is thus moot; while the 0.2 ml/1 limit currently

remains in effect, the agency responsible for this limit is

now EPA rather than DEC. EPA is not subject to the

requirements of Alaska’s Administrative Procedure Act.

IV. DO THE CONDITIONS OF DEC’S CERTIFICATION

ASSURE COMPLIANCE WITH ALASKA’S WATER

QUALITY STANDARD FOR SETTLEABLE SOLIDS?

As noted previously, Alaska’s in-stream settleable

solids water quality standard requires no measureable

increase in settleable solids above natural background

conditions.'4 The record establishes that standard mea-

suring techniques can detect settleable solids concentra-

tions down to approximately 0.1 ml/I.

TFA and NAEC argue that DEC violated federal and

state law by certifying the 539 draft NPDES permits for

placer mines when some of the mines will violate state

water quality standards even assuming they strictly com-

ply with all the conditions and limitations of the permits.

1418 AAC 70.020(b) (Water Quality Parameter (7)) (“[n]o

increase in concentration of sediment, including settleable

solids, above natural conditions”).

App. 19

Specifically, TFA and NAEC maintain that the 0.2 ml/]

effluent limit for settleable solids incorporated into each

permit as a result of the certification process does not in

all cases ensure that placer mine operations “will com-

ply” with Alaska water quality standards.'5 The state

disagrees; it maintains that the 0.2 ml/1 limit provides

“reasonable assurance” of compliance. MAC, on the other

hand, argues that the 0.2 ml/1 effluent limit is too strin-

gent a standard.’

In regard to this issue, the Deciding Officer made the

following relevant findings of fact:

17. The minimum detectable level for set-

tleable solids using the Imhoff cone test is

approximately .1 ml/1.

18. Virtually all placer miners who treat

their effluent utilize settling ponds as the main

treatment method.

19. To meet the permit’s instantaneous

maximum settleable solids effluent limitation of

.2 ml/l, miners must, at a minimum, use prop-

erly designed, constructed and maintained set-

tling ponds.

15 TFA not only seeks invalidation of the 0.2 ml/I effluent

limit, but also requests this court to order DEC to modify its

certification, with prompt notice of the modification to EPA

and all 536 miners, to incorporate an effluent limitation of 0.1

ml/1 for settleable solids.

16 In part, MAC asks this court to void the 0.2 ml/I efflu-

ent limit for settleable solids and to hold that the original

0.7/1.5 ml/I effluent limit for settleable solids shall remain the

enforceable figure until such time as DEC obtains the requisite

information and properly certifies further NPDES permits.

App. 20

20. Properly designed, constructed and

maintained settling ponds will generally pro-

duce effluent with settleable solids concentra-

tions of less than or equal to .1 ml/1. Properly

designed, constructed and maintained settling

ponds will result in in-stream settleable solids

concentrations of less than .1 ml/I.

21. Placer miners who meet the instan-

taneous maximum of .2 ml/I! settleable solids

effluent limit will have in-stream settleable

solids levels of less than .1 ml/1.

22. The draft permit’s excess water bypass

and out-of-stream settling pond requirements

result in reduced water usage, increased treat-

ment efficiency and increased amount of fresh

water available for in-stream dilution, thereby

increasing the assurance that the mining opera-

tion will meet state water quality standards.

23. The instantaneous maximum of .2 ml/1

settleable solids effluent limit is close to the

minimum detectable level for settleable solids. If

one takes into account that this is an instan-

taneous maximum and if one makes an

allowance for stream water dilution and infiltra-

tion dilution, the resultant in-stream settleable

solids increase will be below the .1 ml/1 mini-

mum detectable limit.

24. Dilution ratios of effluent to receiving

water of 1:1 to 1:9 are typical for Alaska placer

mining operations.

25. It is reasonable to assume that there

will be fresh water surface infiltration and fresh

water subsurface infiltration prior to the dis-

charge of the effluent from a settling pond into a

stream.

App. 21

In his conclusions of law pertaining to this issue of

the reasonableness of the 0.2 ml/1 effluent limit on settle-

able solids, the Deciding Officer stated:

An argument has been made that an efflu-

ent limitation of .2 ml/1 for settleable solids will

not provide reasonable assurance of compliance

with water quality standards. The Deciding

Officer does not think that any requestor has

sustained its burden of proof on this issue, and

consequently this argument is rejected.

The evidence indicates that, to meet the per-

mit’s .2 ml/1 limit, a miner must use a properly

designed, constructed and maintained settling

pond. The evidence also indicates that such a

settling pond will produce effluent with settle-

able solids concentrations of .1 ml/I or less.

Furthermore, a placer miner who meets the .2

ml/1 settleable solids effluent limit will have in-

stream settleable solids levels of less than .1

ml/l, which is the minimum detectable limit.

Such a level of settleable solids clearly satisfies

the state water quality standard of “no measur-

able increase.”

The .2 ml/1 effluent limitation is very close

to the minimum detectable level for settleable

solids. If one takes into account the excess water

bypass provision in the draft permit as well as

the out-of-stream settling pond requirement, the

.2 ml/1 limitation is a reasonable limitation. If

one further takes into account in-stream dilution

and increased treatment efficiency, the .2 ml/1

limitation becomes even more reasonable as a

limitation which will assure compliance with

water quality standards.

One can make additional observations

about the appropriateness of the .2 ml/1 limita-

tion. There will be some infiltration dilution in

piacer mining operations. Furthermore, the .2

App. 22

ml/1 limitation is an instantaneous maximum.

That is, the effluent can never exceed .2 ml/] at

any time during the operation of a mining site.

It is reasonable to assume that the effluent qual-

ity for settleable solids will generally be below

-2 ml/1 rather than right at .2 ml/1.

When these assumptions are made, and the

evidence presented at the hearing indicates that

these assumptions are in fact reasonable ones,

the .2 ml/1 effluent limitation for settleable

solids clearly is a reasonable one. The evidence

indicates that DEC is able to say with confidence

that such a limitation will reasonably assure

compliance with water quality standards.

TFA has argued that if one does not do a

site-specific verification for settleable solids in

effluent, then only an effluent limit of .1 ml/1

will assure compliance with water quality stan-

dards. The assumptions underlying such an

approach are not reasonable. While .1 ml/1 will

by definition assure that in every case there is

no measurable increase in settleable solids con-

centrations above natural background, it is not

necessary for the limitation to be that low to

reasonably assure no measurable increase. TFA’s

argument assumes a worst case scenario in

every case and ignores some reasonable

assumptions about dilution, pond performance,

and instantaneous maximums. The evidence

presented at the hearing indicates that TFA’s

argument is not correct when applied to the real

world and actual mining sites.

Dilution, instantaneous maximum consider-

ations, actual performance of settling ponds — all

these factors help to insure that the .2 ml/1

limitation will assure compliance with the water

quality standards. TFA has argued that if the

effluent limitation is not at .1 ml/1 or lower, then

it is possible under some circumstances that

App. 23

there will be a violation of water quality stan-

dards. The Deciding Officer does not interpret

the CRA [Certificate of Reasonable Assurance]

to mean that DEC has assured that there will

never be an incident where a discharge from a

placer mining site in the state increases the set-

tleable solids concentrations in a stream. The

CRA must be more reasonably interpreted. Can

DEC certify that a limitation reasonably assures

compliance with state water quality standards?

If so, then the test is met. The evidence pre-

sented in this case indicates that DEC can satisfy

this test with the .2 ml/1 limitation.!7

17 On appeal the superior court resolved the issue in the

following manner:

The court concludes that there was a reasonable

basis for the administrative decision to include .2 ml/1

settleable solid effluent limitation and therefore the

Deciding Officer’s decision upholding the .2 ml/I limita-

tion should be upheld. .

As pointed out by DEC, practically and economi-

cally it would be impossible in any realistic way to

conduct a site-by-site evaluation of each of the 539

placer miners requesting permits. Instead the agency

determined that in all cases the .2 ml/I settleable solid

effluent limitation would comply with the requirement

that there would be no increase in concentrations above

natural conditions of settleable solids.

Either or both a permit applicant or an interested

group such as TFA may request a hearing on an individ-

ual permit and present evidence to persuade DEC that

the .2 ml/I limitation is either too restrictive or not

restrictive enough. Therefore, any interested party may

have a site-specific review of any of the permits so

certified.

In light of economic and practical considerations,

there is a reasonable basis to have a blanket certification

for all 539 permits since any interested party may come

in on a site-by-site basis and request a review.

App. 24

A. Applicable Standards of Review.

TFA and NAEC maintain that this court should apply

the “substantial evidence” standard to determine

whether the record supports DEC’s finding that a 0.2

ml/I1 standard for settleable solids will lead to compliance

with the state water quality standard. On the other hand,

DEC argues that this case involves mixed issues of law

and fact, and thus this court should defer to DEC’s deter-

mination unless it lacks a reasonable basis.

Since the portion of DEC’s decision construing stat-

utes and regulations governing water pollution is clearly

separable from its factual finding as to whether a 0.2 ml/1

settleable solids effluent limit will lead to compliance

with Alaska water quality standards, both standards of

review are applicable. See Pan Am. Petroleum Corp. v. Shell

Oil Co., 455 P.2d 12, 20-23 (Alaska 1969).

In the instant case, the parties also disagree over the

standard of certainty required of DEC’S NPDES certifica-

tion under the Clean Water Act and federal and state

regulations. This is essentially a legal question of statu-

tory and regulatory interpretation. On such questions, we

apply the deferential reasonable basis test. See id.; Rose v.

Commercial Fisheries Entry Comm'n, 647 P.2d 154, 161

(Alaska 1982). The parties also dispute whether the 0.2

ml/1 standard for settleable solids will lead to compliance

with state water quality standards. We review such fac-

tual questions under the “substantial evidence” test. See

Storrs v. State Medical Bd., 664 P.2d 547, 555 (Alaska), cert.

denied, 464 U.S. 937, 104 S.Ct. 346, 78 L.Ed.2d 312 (1983).

ee Se ae Pe ee ON ee ee ee EIT LP St ey

App. 25

B. Does DEC’s Interpretation of the Standard of Cer-

tainty Required of Its Draft NPDES Permit Certifica-

tion Have a Reasonable Basis?

After reviewing the draft NPDES permit EPA

intended to issue individually to 539 placer miners, DEC

certified the permits (on condition that the limit for set-

tleable solids be set at 0.2 ml/1) based on its conclusion

that there was “reasonable assurance” that discharges

resulting from the permitted activities would comply

with, inter alia, Alaska water quality standards. TFA and

NAEC take issue with the “reasonable assurance” stan-

dard, arguing that under the Clean Water Act and DEC

regulations, DEC may not certify draft NPDES permits

unless the agency assures “strict compliance” with state

standards in all cases and at all discharge points.

Exactly how the standard of certainty advocated by

TFA and NAEC differs from that employed by DEC is

unclear. DEC does not argue that state standards may be

exceeded under certain circumstances or at certain dis-

charge points. Apparently, therefore, TFA and NAEC sim-

ply argue that DEC must provide something more than

“reasonable assurance” of compliance with state water

quality standards in its certification.

Under the “reasonable basis” test, this court will not

lightly interfere with an administrative agency’s inter-

pretation of statutes and regulations which bear on dis-

cretionary determinations within the agency’s area of

expertise. See, e.g., Rose, 647 P.2d at 161. Here, DEC has

authority to certify draft NPDES permits if it determines

that the permits meet statutory and regulatory

requirements.

App. 26

We conclude that DEC’s interpretation of the degree

of certainty required of its certification under the Clean

Water Act, as well as under federal and state regulations,

has a reasonable basis. TFA and NAEC emphasize lan-

guage in the Clean Water Act which requires states to

certify that NPDES permittees “will comply” with state

standards, as well as a DEC regulation which prohibits

violations of Alaska water quality standards. See 33

U.S.C. § 1341(a)(1); 18 AAC 70.010(a). These provisions,

however, do not necessarily require DEC to provide abso-

lute certainty that permittees will never violate state stan-

dards, assuming this sort of guarantee is even possible.

Moreover, DEC applied a “reasonable assurance” stan-

dard in accord with federal regulations implementing the

Clean Water Act, which provide that states must include

within a draft NPDES certification “[a] statement that

there is a reasonable assurance that the activity will be

conducted in a manner which will not violate applicable

water quality standards.” 40 C.F.R. § 121.2(a)(3)

(emphasis added).

C. Does the Record Contain Substantial Evidence to

Support DEC’s Finding That a Settleable Solids

Effluent Limit of 0.2 ml/l Provides Reasonable Assur-

ance That All Permittees Will Comply with State

Water Quality Standards?

Randolph Bayliss, chief of DEC’s Water Quality Man-

agement Section, described in an affidavit how DEC

arrived at the 0.2 ml/I effluent limit for settleable solids

applicable to placer mining operations:

App. 27

The certified permit condition (in this case,

0.2 ml/1 settleable solids) applies to the dis-

charge of placer mining waste prior to entry into

and dilution by the receiving waters. The Water

Quality Standard (in this case, no measurable

increase in sediment) applies in the receiving

waters after dilution in a mixing zone. The

enforcement procedure would go like this: mea-

sure the settleable solids in the receiving waters

upstream of a placer mining discharge, then

measure the settleable solids a reasonable dis-

tance downstream of the placer mine discharge,

say 500 feet. If there is a measurable increase,

there would be a violation of the Water Quality

Standards. This applies only to manmade

increases above natural conditions, but in even

the most heavily naturally silted rivers of

Alaska, there are few with measurable settleable

solids.

Therefore,

1. with 0.1 ml/1 being the lowest detectable

gradation in the testing procedure, and

2. with a reasonable amount of dilution, there

is a reasonable assurance that 0.2 ml/1 in the

discharge would not be measurable after

mixing in the receiving waters, and, with

that added condition, the permits could be

certified as being in compliance for the

Water Quality Standards for sediment.

(Emphasis and parentheticals in original.)

To support the 0.2 ml/I settleable solids limit, DEC

maintains in its brief that “[i]f one makes some reason-

able allowance for in-stream dilution of the .2 ml/1 efflu-

ent prior to the in-stream measurement, the resultant

water quality will . . . approach, if not fall below, the .1

App. 28

ml/l minimum detectable settleable solids level.” DEC

asserts that this holds true regardless of any site-specific

differences. The agency also argues that in order to con-

sistently meet the 0.2 ml/I effluent limit for settleable

solids, placer miners must install settling ponds. It fur-

ther contends that properly constructed settling ponds

will usually produce effluent which will contain settle-

able solid concentrations at or below 0.1 ml/I, even

before dilution by the receiving stream. Finally, DEC

asserts that “infiltration dilution” by groundwater, and

requirements within the NPDES permits for excess water

bypasses and out-of-stream settling ponds, provide fur-

ther assurance that placer mining operations will not

violate the state standard for settleable solids.

When reviewing an agency’s factual findings, we

review the whole record to determine whether the

agency’s findings “are supported by substantial evidence,

i.e., such relevant evidence as a reasonable mind might

accept as adequate to support a conclusion.” Galt v. Stan-

ton, 591 P.2d 960, 963 (Alaska 1979) (quoting Keiner v. City

of Anchorage, 378 P.2d 406, 411 (Alaska 1963)). In this case,

we hold that the record does not support DEC’s finding

that the 0.2 ml/1 effluent limit for settleable solids pro-

vides reasonable assurance that all 539 NPDES permittees

will meet state water quality standards.

DEC’s finding that the 0.2 ml/1 settleable solids limit

will lead to compliance with water quality standards is

largely predicated on an assumption that effluent from

placer mines will undergo “a reasonable amount of

App. 29

dilution” by receiving streams.’* However, DEC Water

Quality Section Chief Bayliss testified that an unspecified

number of the permittees covered by DEC’s blanket certi-

fication utilize most or all of the flow of a stream in their

operations.'9 If a miner uses most or all of the stream in

his or her operations, the record indicates that the water

quality of effluent from the mine will very closely

approximate the water quality of the stream below the

mine because the effluent and the stream are essentially

the same.?° Therefore, if a mine’s effluent contains 0.2

18 In its brief, TFA alludes to the fact that “[bjoth EPA and

DEC regulations allow some consideration of stream mixing in

determining whether a discharge from a particular site results

in violations of water quality standards.” See 18 AAC 70.032; 40

C.F.R. § 131.13. TFA also states in its brief: “While not conced-

ing that the use of mixing zones is legal, we do not raise this

argument here.”

As TFA analyzes this issue, the question to be answered is

whether all streams that receive placer mining discharges have

sufficient flow to enable compliance with water quality

standards.

19 Bayliss also testified that using the entire stream in

placer mining operations was “not typical,” although he did

not know how many permittees used the entire stream.

20 TFA argues that “[i]f a miner uses all of a stream for his

mining operation, then the quality downstream will equal the

quality of the discharge.”

DEC asserts that the use of well-maintained settling ponds

installed according to DEC guidelines will ensure that permit-

tees will comply with the settleable solids effluent limits. How-

ever, the draft NPDES permits as certified do not require

permittees to use settling ponds; rather, the permits simply

prohibit a permittee who decides to construct a settling pond

from constructing it within a stream. Nor are the DEC settling

pond guidelines (contained in a DEC publication entitled

Placer Mining Settling Pond Design Handbook (1983)) mandatory.

App. 30

ml/l of settleable solids, the maximum concentration

allowed by the NPDES permits as certified by DEC, the

stream below the mine will also contain roughly 0.2 ml/1

of this pollutant. This substantially exceeds the water

quality standard for settleable solids. The record there-

fore does not contain substantial evidence to support

DEC’s finding that reasonable dilution of placer mine

effluent will enable all permittees to comply with the

state water quality standard for settleable solids when the

effluent limit is 0.2 ml/l On the contrary, the record

indicates that an undetermined number of miners will

likely violate Alaska’s settleable solids standard, even if

they fully comply with the 0.2 ml/I effluent limit.

In short, TFA has met its burden of production and

persuasion as to those permit holders who utilize most or

all of the flow of the streams in which their mining

operations take place. See 18 AAC 15.270(c) (burden on

party requesting hearing). As to such a permit holder,

DEC’s certification is invalid since it will not assure com-

pliance with Alaska’s water quality standards.?!

On the other hand, as to those permit holders whose

placer mining operations do not utilize most or all of the

flow of the streams used in their mining operations, we

21 Our task here is to ascertain whether the NPDES per-

mits as certified meet state water quality standards for settle-

able solids. The foundation of our ruling is that the NPDES

permit holders in question use most or the entire water flow,

and that under-the permits as certified there is no requirement

that permittees use well-designed and properly constructed (in

accordance with DEC guidelines) settling ponds in their

operations.

App. 31

hold that the record contains substantial evidence to sup-

port the Deciding Officer’s thorough findings and conclu-

sions that reasonable dilution and other relevant factors

affecting the placer mines’ effluent will assure compli-

ance by permittees with Alaska’s water quality standard

of 0.2 ml/1 for settleable solids.?2

V. CONCLUSION.

The superior court’s affirmance of the Deciding Offi-

cer’s decision sustaining DEC’s certification is

AFFIRMED in part, REVERSED in part, and REMANDED

for further proceedings consistent with this opinion.

Upon remand DEC shall take steps to identify those

permit holders, if any, whose placer mining operations

utilize most or all of a stream’s flow in the course of their

respective mining operations. As to any such permit

holders, DEC shall take appropriate steps to withdraw its

certification and vacate the permit.

22 We have reviewed all of the remaining specifications of

errors which have been advanced by TFA, NAEC, and MAC

and have concluded that they are without merit.

App. 32

APPENDIX B

IN THE SUPERIOR COURT

FOR THE STATE OF ALASKA

FOURTH JUDICIAL DISTRICT

TRUSTEES FOR ALASKA;

NORTHERN ALASKA

ENVIRONMENTAL CENTER,

Appellant, peated

= 86-1556 Civ.

STATE OF ALASKA,

DEPARTMENT OF

ENVIRONMENTAL

CONSERVATION, AND

WILLIAM ROSS,

Commissioner of the

Department of

Environmental

Conservation,

Appellee.

MINERS ADVOCACY

COUNCIL, INC.,

Appellant, No. 4FA-85-

7 1690 Civ.

STATE OF ALASKA, 7

DEPARTMENT OF

ENVIRONMENTAL

CONSERVATION, et al.,

Appellee.

(Filed

JUL 31 1987)

ee ee ee ee ee a a

App. 33

MEMORANDUM DECISION

In this consolidated appeal, appellants seek relief

from a Department of Environmental Conservation (DEC)

Deciding Officer’s April 14, 1986, decision upholding a .2

ml/1 settleable solids effluent limitation.

The issues raised on appeal are:

1. Whether a reasonable basis exists for DEC’s

determination that inclusion of the .2 ml/1 settleable

solids effluent limit into the state’s Certificate of Reason-

able Assurance (CRA) is in compliance with state water

quality standards. [Appellant, Trustees for Alaska (TFA)

claims that DEC violated the federal Clean Water Act

(CWA), 33 U.S.C. 1251 et al., and state law,

(a) by issuing a water quality certification that

failed to assure that discharge from all

placer mining operations would result in

compliance with water quality standards;

(b) by failing to analysis (sic) on a site-specific

basis whether discharges from individual

placer mining operations will result in

compliance with state water quality

standards;

placer mining operations on factors of eco-

nomic and technical feasibility.]

2. Whether DEC’s inclusion of the .2 ml/1 settleable

solids effluent limit into the state’s (CRA) constitutes a

regulation requiring compliance with Alaska Administra-

tive Procedures Act before adoption.

3. Whether DEC’s failure to certify the Federal Draft

National Pollution Discharge Elimination System

(NPDES) permit within 60 days invalidated the state’s

certification.

App. 34

4. Whether DEC’s inclusion of the .2 ml/1 settleable

solids effluent limit into the (CRA) resulted from a collu-

sive agreement between the state and environmental

interests groups.

Factual Background

In order to discharge pollutants into waters of the

United States, a person must obtain a National Pollution

Discharge Elimination System (NPDES) permit from the

Environmental Protection Agency (EPA). (33 U.S.C. 1311)

This provision applies to placer miners in Alaska. EPA

can not issue a final NPDES permit until the state in

which the discharge originates has been given an oppor-

tunity to review the EPA draft permit to determine

whether the permit’s terms reasonably assure compliance

with the state’s water quality standards. [40 CFR Section

121.2(a)(3); Section 124.53] The state is required to made

(sic) a determination whether EPA’s draft permit terms

are adequate to assure compliance with state water qual-

ity standards. If the state determines that EPA’s draft

permit terms are not adequate, the state must include in

the Certificate of Reasonable Assurance (CRA) any condi-

tions more stringent then (sic) those in the draft permit

which the state finds necessary to meet state water qual-

ity standards. [40 CFR Section 124.53(e)(2)]

Under 40 CFR 124.55(c)

A state may not condition or deny a certification

on the grounds that state law allows a less strin-

gent permit condition. The regional administra-

tor shall disregard any such certification

conditions, and shall consider those conditions

or denials as waivers of certification.

App. 35

Thus, a state may condition the issuance of a permit on

more stringent limitations than that imposed by EPA but

cannot make them less stringent.

Four hundred forty-six (446) placer miners had

NPDES permits for 1984. EPA decided to modify the 1984

permits for 1985 and by a single draft permit proposed

the modification for those permits and also proposed to

issue similar permits to 93 placer miners who had applied

for permits for 1985. On January 31, 1985, as required by

40 C.FR. 124.53(a), EPA transmitted the single draft per-

mit to DEC for review. (The draft permit was for 446

placer miners who had permits issued in 1984 and 93

additional placer miners who sought permits for 1985.)

The draft permit contained the following effluent

limitations:

a. For settleable solids —- .7 ml/1 monthly aver-

age, 1.5 ml/] instantaneous maximum;

b. Turbidity - 5 NTU instantaneous maximum;

c. Arsenic - 0.05 mg/I instantaneous

maximum.

A joint EPA/DEC public notice was mailed to the 439

1984 permit holders and 93 permit applicants for 1985, as

well as being published. The notice announced, among

other things, the state’s intent to consider certification of

the modified draft permit pursuant to Section 401 (33

U.S.C. 1341) of the Clean Water Act (CWA). Public hear-

ings were held by EPA on the draft permits in March of

1985. DEC presented testimony that the .7/1.5 ml/] settle-

able solids effluent limit was too lenient to be consistent

with state water quality standards.

App. 36

On approximately March 15, 1985, DEC notified

Appellant, Miners Advocacy Council, Inc., (MAC) and

TFA that the state was considering certification of a .2

ml/1 settleable solids effluent limitation. On March 30,

1985, at the annual mining convention in Fairbanks, DEC

Commissioner William Ross, in his formal address to the

state’s placer miners, advised that DEC intended to cer-

tify the draft permit with a .2 ml/] settleable solids efflu-

ent limitation.

DEC sent its Certificate of Reasonable Assurance

(CRA) to EPA on April 29, 1985. The CRA applied both to

the 446 placer miners who had permits for 1984 as well as

the 93 new applicants for 1985. The CRA stated that DEC

certified that there was reasonable assurance that the

proposed activity was in compliance with the require-

ments of Section 401 of the CWA which includes the

Alaska Water Quality Standards and the standards of the

_ Alaska Coastal Management Program provided that the

instantaneous maximum settleable solids effluent limita-

tion was .2 ml/I1.

EPA, after receipt of DEC’s CRA notified the permit

holders to include the .2 ml/1 limit in their permits. No

change was requested by DEC in the 5 NTU instan-

taneous maximum as an effluent limitation for turbidity

or to the 0.05 mg/1 instantaneous maximum as an effluent

limitation for arsenic. Thus, the decision as to turbidity

and arsenic is not a decision of DEC but of EPA.

After notification to include the .2 ml/I limit, a

number of parties requested an administrative adjudica-

tion pursuant to 18 AAC 15.200. The requests were con-

solidated into one prodeeding. Preliminarily MAC

App. 37

requested a stay of the .2 ml/1 limit claiming that it was a

regulation and not adopted pursuant to the Alaska

Administrative Procedures Act; TFA claimed the permits

were invalid since the certification should have been

done on a site-specific basis rather than blanketedly. Both

these request were denied by the Deciding Officer.

[On May 6, 1985, appellee, MAC, filed a complaint

against the state in this court challenging numerous

aspects of the state’s water quality enforcement scheme

including the state’s certification of the 1985 NPDES per-

mits. Appellee, TFA, intervened. On May 30, 1985, MAC

filed with DEC a demand for an administrative adjudica-

tion on the state’s NPDES'’s certification. TFA and various

individual miners filed similar demands. The demands

were consolidated for an adjudicatory hearing which was

held on February 3-6, 1986. The final decision upholding

DEC’s certification of the .2 ml/I1 settleable solids limit

was issued on April 14, 1986. Both MAC and TFA have

appealed from that decision. The appeals have been con-

solidated before this court.]

QUESTIONS ON APPEAL

I. Is the .2 ml/1 settleable solids effluent limit a

regulation?

MAC asserts that the .2 ml1/I settleable solids effluent

limit is a regulation and was not adopted pursuant to the

Alaska Administrative Procedures Act.

The Deciding Officer rejected this argument by order

dated November 6, 1985, and reaffirmed that decision in

his April 14, 1986, decision. AS 44.62.640(a)(3) defines a

regulation as:

App. 38

(3) “regulation” means every rule, regulation,

order, or standard of general application or the

amendment, supplement or revision of a rule,

regulation, order or standard adopted by a state

agency to implement, interpret, or made specific

the law enforced or administered by it, or to

govern its procedure, ... “regulation” includes

“manuals,” “policies, ” “instructions,” “guides

to enforcement,” “interpretative bulletins,”

“interpretations,” and the like, which have the

effect of rules, orders, regulations or standards

of general application, and this and similar

phraseology shall not be used to avoid or cir-

cumvent this chapter; whether a regulation,

regardless of name, is covered by-this chapter

depends in part on whether it affects the public

or is used by the agency in dealing with the

public;

The label placed on a particuiar “statement by an

administrative agency” does not determine the appli-

cability of the Adininistrative Procedures Act. The state-

ment may still be “a regulation” requiring compliance

with the Alaska Administrative Procedures Act. Kenai

Pen. Fishermen’s Coop. Ass'n v. State, 628 P.2d 897, 905

(Alaska 1981). Here as in State v. Northern Bus Co. Inc., 693

P.2d 319, 323 (Alaska 1984) there is a sufficient regulatory

scheme to permit DEC to adjudicate all the permits. The

.2 ml/l is an adjudication rather than legislation.

Although the .2 ml/1 applies to a number of permits, it is

an adjudication; an interpretation of existing regulations

rather than promulgation of a regulation. Therefore, the

Deciding Officer’s ruling that the .2 ml/1 is not a regula-

tion is AFFIRMED.

App. 39

II. Is the .2 ml/1 settleable solids effluent limit

appropriate?

The state contends that there is a reasonable basis for

DEC’s determination that the .2 ml/1 settleable solids

effluent limit gives reasonable assurance of compliance

with state water quality standards. TFA contend that the

Deciding Officer’s findings are not supported by substan-

tial evidence and that DEC violated the federal CWA and

state law by issuing a water quality certification (a) that

failed to assure that discharges from all placer mining

operations would result in compliance with water quality

standards; (b) by failing to analyze each individual per-

mit application on a site-specific basis; and (c) be basing

its decision on factors of economic and technical fea-

sibility. MAC contends that the certification process

requires a site-by-site analyze (sic) rather than a blanket

certification.

The state asserts that a reasonable basis test should

be applied in reviewing the decision to include .2 ml/]

while TFA claims a substantial evidence test is appropri-

ate. The substantial evidence test is used “to review ques-

tions of fact to determine if there is an evidentiary basis

to support an agency’s decision on the merits of an indi-

vidual case.” Galt v. Stanton, 591 p.2d 960, 966 (Alaska

1979). The reasonable basis test is used “where there are

mixed questions of fact and law involving agency exper-

tise and/or broad policy considerations.” Jager v. State,

537 P.2d 1100, 1107 (Alaska 1975)

The reasonable basis test, stated in another way, is

that the action was not unreasonable, arbitrary or an

abuse of discretion. [North Slope Borough v. LeResche, 581

App. 40

P.2d 1112 (Alaska 1978)] The Supreme Court has also

stated that the reasonable basis test is to determine that

the administrative decision was not arbitrary, capricious

or prompted by corruption. [Moore v. State, 553 P.2d 8,

p.36, n.20 (Alaska 1976)]

As pointed out in Jager v. State, 537 P.2d 1100, 1107

(Alaska 1975):

The reasonable basis standard permits the court

to consider factors of agency expertise, policy,

and efficiency in reviewing discretionary deci-

sions. It is similar to the standard of “unreason-

able, arbitrary, and capricious action” under

which actions committed to agency discretion

are traditionally reviewed. . . . (Footnotes

omitted.) :

Here, contrary to the assertion of TFA, a reasonable

basis test is appropriate since the certification decision

concerns mixed questions of fact and law involving over-

all agency expertise and policy considerations.

The court concludes that there was a reasonable basis

for the administrative decision to include .2 ml/] settle-

able solid effluent limitation and therefore the Deciding

Officer’s decision upholding the .2 ml/1 should be

upheld.

As pointed out by DEC, practically and economically

it would be impossible in any realistic way to conduct a

site-by-site evaluation of each of the 539 placer miners

requesting permits. Instead the agency determined that in

all cases the .2 ml/1 settleable solid effluent limitation

would comply with the requirement that there would be

no increase in concentrations above natural conditions of

settleable solids.

App. 41

Either or both a permit applicant or an interested

group such as TFA may request a hearing on an individ-

ual permit and present evidence to persuade DEC that

the .2 ml/I limitation is either too restrictive or not

restrictive enough. Therefore, any interested party may

have a site-specific review of any of the permits so

certified.

In light of economic and practical considerations,

there is a reasonable basis to have a blanket certification

for all 539 permits since any interested party may come in

on a site-by-site basis and request a review.

III. Did DEC inclusion of the .2 ml/1 settleable

solids effluent limit result from a collusive

agreement between the state and interested

groups?

MAC claims that the .2 ml/1 limitation was an agree-

ment between DEC and interested environmental groups,

and that the decision violated the Alaska Open Meetings

Act. The Deciding Officer rejected this argument, finding

that there was no evidence to substantiate any such

agreement. This finding by the Deciding Officer, based on

his opportunity to judge the credibility of the witnesses

and evidence presented, should only be reversed if

clearly erroneous. Kennedy Associates, Inc., v. Fischer, 667

P.2d 174, 179 (Alaska 1983); Martens v. Metzgar, 591 P.2d

541, 544 (Alaska 1979). In reviewing the record with this

in mind, the Deciding Officer’s decision regarding no

collusion is not clearly mistaken. Since the .2 ml/1 was

not the result of any agreement between DEC and envi-

ronmental groups, MAC’s assertion that the Alaska Pub-

lic_ Meetings Act-was violated is without merit.

App. 42

IV. TFA assert that the certification of .2 ml/1 for

settleable solids as an effluent limitation will

result in violations of water quality standards at

some sites.

As stated above, there is a reasonable basis for DEC’s

determination that .2 ml/1 will/comply with state water

quality standards. It was reasonable for DEC to_make a

blanket determination in light of the economic and practi-

cal considerations of making a site-by-site determination.

As stated above, if an interest group feels that a specific

location will not meet water quality standards with a .2

ml/1 effluent limitation, they have the opportunity to

present evidence at a hearing and persuade DEC to

change the effluent limitation at a particular site.

V. Does DEC’s failure to certify the Draft National

Pollution Discharge Elimination System permit

within 60 days invalidate their certification?

MAC claims that since DEC did not certify the

NPDES permit within 60 days, the certification is void. 40

CFR 125.53(c)(3) provides that the state would be deemed

to have waived its right to certify unless that right is

exercised within a specified reasonable time not to exceed

60 days from the date the draft permit is mailed to the

certifying state agency. The record shows that EPA trans-

mitted the draft NPDES permit to DEC on January 31,

1985. The certificate of reasonable assurance was for-

warded to EPA on April 29, 1985, approximately 90 days

after EPA’s submittal to the state.

App. 43

The Deciding Officer concluded that the 60 day time

limit had been exceeded but determined that the certifica-

tion was not void. He concluded that the record did not

reflect why EPA included the effluent limitation

requested by the state when it was submitted to them in

excess of 60 days. He speculated that EPA may have

decided that it was appropriate to relax the strict time

requirement in this case. Since the burden of proof is on

MAC and that the record was not developed, he con-

cluded that MAC had not met its burden and therefore

upheld the certification. The state claims that MAC did

not raise this below, nor in its points on appeal. However,

the Deciding Officer ruled on the point and although not

stated in its points on appeal, since the issue was raised

below and has been briefed by the parties, the court will

consider it.

This court agrees with the Deciding Officer that the

60 day violation does not make the inclusion of the .2 ml/

1 void. EPA saw fit to include it and apparently waived

the strict 60-day requirement. The proper entity to dis-

cuss whether or not the 60 day limitation should have

been waived is with EPA not the state. Until such time as

EPA reverses its decision, the .2 ml/1 requirement is valid

and should be included in all permits.

For the reasons stated above, the decision of the

Deciding Officer dated April 14, 1986, is AFFIRMED.

App. 44

DATED at Fairbanks, Alaska this 31st day of July,

1987.

/s/ Jay Hodges

JAY HODGES

Superior Court Judge

App. 45

APPENDIX C

BEFORE THE

ALASKA DEPARTMENT OF

ENVIRONMENTAL CONSERVATION

In Re: 1985 NPDES Placer )

Mining Permit Certification )

e )

DECISION

This case involves a challenge by seventy-three

groups and individuals to the certification by the State of

Alaska’s Department of Environmental Conservation of

the 1985 NPDES Placer Mining Permits. A hearing in this

matter was held in Fairbanks, Alaska on February 3 - 6,

1986. The decision of the Deciding Officer follows.

A. Findings of Fact

1. These proceedings arise out of a certification by

the State of Alaska’s Department of Environmental Con-

servation (“DEC”) pursuant to Section 401 of the Clean

Water Act of 539 permits issued to the placer mining

industry in Alaska by the Environmental Protection

Agency (“EPA”). The permits involved are National Pol-

lution Discharge Elimination System (“NPDES”) permits,

which are issued under Section 402 of the Clean Water

Act (“CWA”).

2. In February of 1985 DEC received a single draft

NPDES permit that EPA proposed to issue as a modified

permit to each of 446 placer miners who had permits

App. 46

issued in 1984 and to each of the 93 additional placer

miners who sought permits in 1985.

3. The draft permit from EPA contained the follow-

ing effluent limitations: for settleable solds (sic), 0.7 ml/1

monthly average, 1.5 ml/1 instantaneous maximum; for

turbidity, 5 NTU instantaneous maximum; for arsenic,

0.05 mg/l instantaneous maximum.

4. A joint EPA/DEC public notice was mailed to

each of the approximately 446 1984 permittees in late

January, 1985. This notice was published beginning in

February of 1985. The notice announced among other

things, the state’s intent to consider certification of the

modified draft permit pursuant to Section 401 of the

Clean Water Act.

5. A joint EPA/DEC public notice was mailed to

each of the approximately 93 1985 permit applicants in

February, 1985. This notice announced, among other

things, the state’s intent to consider certification of the

1985 draft permit pursuant to Section 401 of the CWA.

6. Public hearings were held by EPA on the draft

permits in March of 1985. At these hearings DEC testified

that it believed that the .7/1.5 ml/1 settleable solids efflu-

ent limit in the draft permits was too lenient to be consis-

tent with state water quality standards.

7. The state water quality standard for settleable

solids is no measurable increase above natural condi-

tions. The standard for turbidity is a level not to exceed 5

NTU above natural conditions. The standard for arsenic

is a level not to exceed .05 mg/l. See 18 AAC 70.020; 18

App. 47

AAC 80.050. There is also a provision for a “mixing zone”

in the state water quality regulations. 18 AAC 70.032.

8. In a meeting on or about March 15, 1985 DEC

notified the Executive Director of the Alaska Miners

Association, Jim Jinks, and the Trustees for Alaska

(“TFA”) attorney, Eric Smith, that the state was consider-

ing certification of a .2 ml/1 settleable solids effluent

limitation.

9. On March 30, 1985 at the annual mining conven-

tion in Fairbanks, Alaska, DEC Commissioner William

Ross, in his formal address to the State’s placer miners,

stated that DEC intended to certify the draft permit at a .2

ml/1 settleable solids effluent limitation.

10. On approximately April 29, 1985 DEC sent its

Certificate of Reasonable Assurance with a cover letter to

EPA. Exhibit 23. This CRA was applicable both to the

modified permits for the 446 placer mining discharges

which were permitted in 1984 and also to the permits for

the 93 placer mining discharges which were to be permit-

ted in 1985. The CRA stated that public notice of the

application for the certification had been made in accor-

dance with 18 AAC 15.180. The CRA stated that DEC

certifiéd that there was reasonable assurance that the

proposed activity was in compliance with the require-

ments of Section 401 of the CWA which includes the

Alaska Water Quality Standards and the standards of the

Alaska Coastal Management Program provided that the

instantaneous maximum settleable solids effluent limita-

tion was .2 ml/1.

11. At the request of the Alaska Miners Association,

DEC held back delivery of the Certificate of Reasonable

App. 48

Assurance (“CRA”) to EPA in order to give the Associa-

tion additional time to comment on the .2 ml/1 effluent

limit.

12. The inclusion by DEC of the .2 ml/1 settleable

solids effluent limit in the CRA was not the result of any

agreement or collusion between DEC and any other party.

13. Following the receipt of DEC’S CRA, EPA mod-

ified the draft permits to include the .2 ml/1 limit. DEC

did not request in its CRA any change to the 5 NTU

instantaneous maximum as an effluent limitation for tur-

bidity or to the 0.05 mg/! instantaneous maximum as an

effluent limitation for arsenic.

14. A number of parties timely filed requests for

adjudication of DEC’s certification pursuant to 18 AAC

05.200. These requests were consolidated into one

proceeding. .

15. The Deciding Officer denied a motion for stay of

the .2 ml/1 limit in a decision rendered in June, 1985. The

Deciding Officer subsequently denied a motion by the

Miners Advocacy Council (“MAC”) to overturn the certi-

fication as an impermissably promulgated regulation in a

decision rendered in November, 1985. The Deciding Offi-

cer also denied a motion by TFA for partial summary

judgment in which TFA argued that DEC was required to

perform its certification on a site-specific basis.

16. An administrative hearing was held in this mat-

ter in Fairbanks on February 3-6, 1986. At this hearing the

Deciding Officer announced that he would reconsider

TFA’s motion for partial summary judgment. The Decid-

ing Officer also announced that he would treat a motion

App. 49

for summary judgment submitted by MAC on the issues

of “review of specific forms” and “agreement” as a

motion made in the context of the hearing and not as a

pre-hearing motion.

17. The minimum detectable level for settleable

solids using the Imhoff cone test is approximately .1 ml/1.

18. Virtually all placer miners who treat their efflu-

ent utilize settling ponds as the main treatment method.

19. To meet the permit’s instantaneous maximum

settleable solids effluent limitation of .2 ml/l, miners

must, at a minimum, use properly designed, constructed

and maintained settling ponds.

20. Properly designed, constructed and maintained

settling ponds will generally produce effluent with settle-

able solids concentrations of less than or equal to .1 ml/1.

Properly designed, constructed and maintained settling

ponds will result in in-stream settleable solids concentra-

tions of less than .1 ml/1.

21. Placer miners who meet the instantaneous maxi-

mum of .2 ml/1 settleable solids effluent limit will have

in-stream settleable solids levels of less than .1 ml/1.

22. The draft permit’s excess water bypass and out-

of-stream settling pond requirements result in reduced

water usage, increased treatment efficiency and increased

amount of fresh water available for in-stream dilution,

thereby increasing the assurance that the mining opera-

tion will meet state water quality standards.

23. The instantaneous maximum of .2 ml/1 settle-

able solids effluent limit is close to the minimum detect-

able level for settleable solids. If one takes into account

App. 50

that this is an instantaneous maximum and if one makes

an allowance for stream water dilution and infiltration

dilution, the resultant in-steam settleable solids increase

will be below the .1 ml/l minimum detectable limit.

24. Dilution ratios of effluent to receiving water of

1:1 to 1:9 are typical for Alaska placer mining operations.

25. It is reasonable to assume that there will be

fresh water surface infiltration and fresh water subsur-

face infiltration prior to the discharge of the effluent from

a settling pond into a stream.

26. Stream flow, soil characteristics, amount of pay-

dirt moved, effluent flow and other site characteristics

can vary greatly at a single site over time. In particular,

stream flow and effluent flow values can vary greatly

over short periods of time and throughout a mining

season.

27. The accurate measurement of such matters as

stream flow, effluent flow, turbidity, arsenic concentration

specific gravity and other water quality parameters

requires the use of complex scientific methods and equip-

ment. For such measurements to be reasonably accurate

they must be conducted by persons properly trained in

water quality analysis techniques.

28. Virtually no placer miners possess or use in-

stream flow gauges, effluent flow gauges, turbidometers

or other equipment which is needed to accurately mea-

sure stream flow, effluent flow, turbidity, and other water

quality parameters.

29. Because of the lack of expertise, training and

proper equipment, the vast majority of placer miners are

App. 51

unable to provide reliable data on almost any water qual-

ity or quantity parameter other than settleable solids. One

cannot obtain accurate stream and effluent flow data by

“eyeballing” or “guessing” the flow volume or flow ratio.

30. The NPDES permit applications, also known as

the Short Form C applications, and the Tri-Agency appli-

cations are forms filled out by the miners and these forms

do not contain sufficient information to permit proper

site-by-site certification by DEC. Both applications lack

effluent water quality information, background water

quality information and meaningful stream flow and

effluent flow information. The flow data provided by the

miners in these two applications is based upon an “eye-

ball guess” and is unreliable. The data contained in the

Short Form C applications and the Tri-Agency applica-

tions is not field checked for accuracy.

31. The 539 permitted mine sites are generally

located in remote areas of the state, and access to the sites

is often limited and expensive.

32. Virtually no verified stream flow data, effluent

flow data, pollutant concentration data, or turbidity data

exists for the numerous streams on which placer mining

activity is permitted.

33. Development by DEC of reliable site-specific

stream flow data, effluent flow data, pollutant concentra-

tion data and turbidity data would be extremely expen-

sive and time consuming.

34. DEC does not currently have the staff and the

budget to reliably certify in a timely manner 539 placer

mining permits on a site-by-site basis.

App. 52

35. Settleable solids, turbidity and arsenic constitute

different and distinct water quality parameters. For

example, settleable solids and turbidity are measured

through different tests and cause different impacts on

aquatic systems. Even if one lowers settleable solids

levels below the minimum detectable limit, one may still

have extremely high turbidity levels due to the small

particles which remain suspended in the water column.

The elimination of settleable solids altogether would still

not assure that in-stream turbidity levels would be in

compliance with state water quality standards.

II. Analysis

In this adjudication proceeding, the burden of proof

and the burden of going forward with the evidence is on

the requestors. See 18 AAC 15.270(c). For purposes of

analysis there are three main categories of argument pre-

sented by the requestors in this proceeding: (1) The argu-

ment that there were deficiencies in connection with the

public notice and other procedural items related to the

state’s certification decision in this matter; (2) the argu-

ment that the State’s certification decision was the prod-

uct of an “agreement” between the State and

environmental groups and thus void; and (3) the argu-

ment that the effluent limit of .2 ml/1 for settleable solids

was improperly arrived at and will not assure compliance

with state water quality standards. Each of these three

categories of argument is discussed below.

App. 53

A. Procedural Issues

1. Procedural requirements for a “regulation”

MAC has earlier argued in the course of these pro-

ceedings that the .2 ml/1 effluent limit for settleable

solids which was certified by the state-was really a regu-

lation. MAC has argued that, since the .2 ml/1 effluent

limit was a regulation, the limit was invalid because DEC

did not comply with the procedural requirements set

forth in the statutes for the enactment of a regulation.

In an order dated November 6, 1985 the Deciding

Officer rejected MAC’s argument and concluded that the

effluent limit was not a regulation but rather part of a

certification action by the state. That earlier order is

confirmed by the Deciding Officer.

2. Public Notice

Several requestors have argued that the State did not

give proper notice to the 1984 NPDES permittees that the

state intended to certify the 1985 modified draft permits

on anything other than the revised turbidity and arsenic

effluent limitations proposed by EPA. The requestors also

argue that the state lacked the legal authority to certify

the modified 1985 draft NPDES permits at all because the

state had earlier waived certification of the 1984 draft

NPDES permits. Alternatively, it is argued that the state

could at most certify the limitations for turbidity and

arsenic which had been modified by EPA. The Deciding

Officer rejects these arguments.

The requirements for public notice by the state in

certification actions are set forth in 18 AAC 15.140. That

App. 54

regulation provides that public notice of the certification

application will be published jointly with notice of pro-

posed action by EPA.

The joint EPA/DEC notice with regard to the 1985

modified draft permits was published and it stated as

follows:

State Certification. This notice will also serve as

Public Notice of the Intent of the State of

Alaska, Department of Environmental Conser-

vation to consider certifying that the subject

discharges will comply with the applicable pro-

visions of Sections 208(e), 301, 302, 303, 306 and

307 of the Clean Water Act. The NPDES permits

will no [sic] be issued until the certification

requirements of Section 401 have been met.

Exhibit 20, p.2. The notice also set forth a 30 day period

for comments by the public on the topic of state certifica-

tion and provided an address for the sending of such

comments.

Nothing in the public notice indicates that the state

intended to certify compliance of the discharges only

with the arsenic and turbidity water quality standards.

By its very terms the notice declares that the state

intended to conduct a CWA § 401 certification. Such a

certification means that the state must evaluate whether

or not the modified draft permits from EPA reasonably

assure that there will be compliance with all applicable

state water quality standards.

The public notice thus complied with the require-

ments of 18 AAC 15.140 and gave legal notice of the state

certification action with regard to the modified permits. It

should also be noted that there was, in addition to the

App. 55

legal notice, abundant actual notice to the mining com-

munity that the state intended to review for certification

purposes the entire modified draft permit and not just the

modified turbidity and arsenic limitations.

The requestors next argue that, even if the state com-

plied with the public notice requirements for its certifica-

tion action, the state was barred from reviewing all or

part of the modified draft permits because it had earlier

waived certification of the 1984 draft permits. The reques-

tors do not cite any supporting authority for this

argument.

The CWA states that EPA must provide the state an

opportunity to grant, waive, or deny certification of any

draft NPDES permit. There is no provision that states that

if EPA submits a modified draft permit to the state for

certification, that the state cannot review the permit if it

earlier waived certification or that it can review only the

modified portion of the draft permit for certification pur-

poses. When the state received the modified draft permits

in 1985, it was obligated to perform its certification func-

tion based on the information it had available to it in

1985. The state’s earlier action in 1984 did not constitute a

bar or a waiver to its taking such certification action in

1985.

3. Public Hearing

One requestor, Kenneth Manning, has argued that

DEC was required to have an additional public hearing.

His argument is that AS 46.03.070 requires a public hear-

ing before DEC may adopt pollution standards. Since the

effluent limitation of .2 ml/1 for settleable solids is a

App. 56

“standard”, argues Mr. Manning, DEC should have held a

public hearing on this proposed “standard.” The Decid-

ing Officer rejects this argument.

In the first place, the effluent limitation of .2 ml/1

which was certified by DEC for settleable solids was not a

“standard” as that term is used in AS 46.03.070. The .2

ml/1 effluent limitation was a limitation for these particu-

lar NPDES permits only. The limitation was not a pollu-

tion standard generally applicable to all the waters of the

state.

No special hearing was required under state or fed-

eral law to review the certification of the draft NPDES

permits by the State. There was the joint EPA/DEC public

hearing that was in part a public hearing on the state

certification issue. Once the state formulated its certifica

tion decision, however, it was not necessary that the state

then have a public hearing to discuss this formulated

decision. Such an extra layer of hearings in the event that

state makes any changes to the limitations in the EPA’s

draft permit is simply not required by law. A permittee

can provide input to the state certification process at the

joint public hearing. A permittee can also request an

adjudicatory hearing from the state after the receipt of his

permit. There is no requirement that the state afford an

additional hearing at the time that it is proposing to

certify a different effluent limit from that included by

EPA in its draft permit.

4. Timeliness of Certification

One requestor, Ron Rosander, has argued that the

state’s failure to certify the draft 1985 NPDES permits in a

App. 57

timely manner constitutes a waiver of its right to certify.

His argument is as follows. The state was given a 60 day

time period by EPA for certification. The state was told by

EPA that it would be deemed to have waived its right to

certify unless the certification right was exercised within

60 days of receipt of the EPA letter which accompanied

the draft permits. The state transmitted its Certificate of

Reasonable Assurance to EPA on or about April 29, 1985.

This date was more than 60 days after the state received

the draft permits from EPA, and so the state should be

held to have waived its certification right. The Deciding

Officer rejects this argument.

The state did in fact apparently communicate its deci-

sion to EPA about certification more than 60 days after its

receipt of the draft permits. EPA incorporated the revised

effluent limitation from the state’s certification into the

final NPDES permits for 1985. There was no testimony or

other evidence as to why EPA acted as it did in this.

matter. EPA may have decided that it was appropriate to

relax the strict time requirement in this case. The party

with the burden of proof clearly has the responsibility to

develop the record in this regard, and such development

was not done.

This argument is really one which would more

appropriately be made to the EPA than to the state. Mr.

Rosander is arguing that EPA should not have acted as it

did in agreeing to modify the permits. A challenge to the

appropriateness of EPA’s action should be brought before

that federal agency. The Deciding Officer is not in a

position to review the appropriateness of EPA's actions in

this matter, even if there were sufficient evidence on this

point in the record.

App. 58

The certificate of reasonable assurance issued by the

state is not rendered void by the timeliness argument.

5. Specific References in Certification

One requestor, Ron Rosander, has argued that the

State’s failure to cite specific CWA or state law references

in connection with its change in the effluent limitation for

settleable solids renders the state certification void. The

argument is as follows. Federal regulations require that

state certification be in writing and, where more stringent

than the conditions in the EPA draft permit, that the

certification cite the CWA or state law references upon

which that condition is based. Since the state did not cite

the CWA or state law references, argues Mr. Rosander,

the certification action by the state is void. The Deciding

Officer rejects this argument.

The Certificate of Reasonable Assurance (“CRA”)

submitted to EPA by DEC states as follows:

Having reviewed the application an (sic) com-

ments received in response to the public notice,

the Alaska Department of Environmental Con-

servation certifies that there is no reasonable

assurance that the proposed activity, as well as

any discharge which may result, is in compli-

ance with the requirements of Section 401 of the

Clean Water Act which includes the Alaska Water

Quality Standards, 18 AAC 70, and the standards of

the Alaska Coastal Management Program, 6 AAC

80, provided that the instantaneous maximum settle-

able solids effluent limitation be 0.2 milliters per

liter. (emphasis added)

The cover letter from DEC which accompanied the

CRA set forth at page 2 the citation of 18 AAC 70.020(b)

App. 59

and noted the requirement that there be “no measurable

increase in concentrations of sediment above natural con-

ditions.” See Exhibit 23. _

The Deciding Officer concludes that the state certi-

fication did cite the relevant C.W.A. or state law refer-

ences upon which the .2 ml/1 effluent limitation was

based. Moreover, this argument again is one which is

more appropriately made to EPA than to the state since it

involves an allegation that EPA should not have changed

the effluent limitation for settleable solids in the permits

upon receipt of the state’s certificate of reasonable assur-

ance. The fact is that EPA did modify the permits. If a

requestor believes that EPA acted improperly, then such

an argument should be raised before EPA.

B. The Agreement Argument

One of the requestors, MAC, has argued that DEC

entered into an agreement with various environmental

groups to certify the effluent limit for settleable solids at

.2 ml/1, and that such an agreement constitutes an abuse

of discretion and invalidates the certification decision by

the State. The Deciding Officer rejects this argument.

The evidence in this proceeding indicates that the

inclusion of the .2 ml/I settleable solids effluent limita-

tion into the CRA was not the result of any agreement

between the State and various interest groups. The

requestors have not produced credible evidence that any

such agreement existed. The testimony of Randolph

Bayliss and Randall Rodgers establishes that there was

not any such agreement.

App. 60

It is not at all clear that the effluent limitation of .2

ml/1 for settleable solids would be subject to successful

attack even if it were shown to be the product of an

agreement between the State and certain parties. There

would still seem to be the fundamental question as to

whether the limitation was an appropriate and reasonable

one. It is unnecessary for the Deciding Officer to reach

this question, however, because MAC has not sustained

its burden of proof with regard to establishing the propo-

sition that the effluent limitation for settleable solids was

reached as the result of an agreement between DEC and

environmental groups.

C. .2 ml/l As An Effluent Limitation

1. Did DEC Consider Improper Factors in Certifying the

NPDES Permits?

The argument has been made that DEC based its

certification decision on the economic and physical

attainability of the .2 ml/1 effluent limitation for settle-

able solids, and that such a basis for its decision was

improper. The Deciding Officer concludes that DEC did

not base its certification decision on the economic and

physical attainability of the effluent limit.

The testimony of Randolph Bayliss was that the eco-

nomic and physical attainability of the .2 ml/! effluent

limitation was not the basis for certification by DEC.

Transcript, Vol. 3, p. 252-253. This testimony is both cred-

ible and persuasive.

TFA has argued that the cover letter to EPA which

accompanied DEC’s CRA discussed the physical and eco-

nomic attainability of the .2 ml/1 effluent limitation, and

App. 61

that this portion of the letter gives the actual rationale for

the certification decision by DEC. This argument is not

supported by the factual evidence in the case. The evi-

dence indicates that the comments in DEC’s cover letter

which pertained to physical and economic attainability

were included as a matter of general or incidental inter-

est. The .2 ml/1 effluent limitation was, in the opinion of

DEC, needed to provide reasonable assurance of compli-

ance with water quality standards.

2. Site-Specific Analysis

A number of the requestors have argued that certi-

fication of a permit for placer mining must be made on a

site-specific basis. Since there was no site-specific anal-

ysis underlying the state’s certification in this matter, the

requestors argue that the certification is invalid. The

Deciding Officer rejected this argument when it was sub-

mitted as a motion for partial summary judgment prior to

the hearing in this case, and the Deciding Officer again

rejects the argument.

There is no requirement in either federal or state law

that DEC perform a site-by-site evaluation of each placer

mining operation in the state before any certification

takes place. While a site-by-site analysis is certainly not

precluded by law, it is not the only valid approach which

DEC could follow in the certification process.

It is relevant in evaluating the site-specific proposal

to note that such a certification process would be, in

practical terms, extremely difficult if not impossible to

perform. DEC does not possess the necessary site-specific

information, nor the staff to gather such information for

App. 62

the 539 placer mining sites in the state. It is not a viable

option to require a site-by-site analysis based on informa-

tion supplied by the individual placer miners. The Decid-

ing Officer is convinced by the evidence presented at the

hearing that such information would for the most part be

“guesses” by the individual miners and thus inherently

unreliable. To require meaningful site-specific analysis by

DEC prior to certification would mean that DEC would

either have to waive certification or obtain a lengthy

extension of time from EPA within which to make the

certification decision.

The Deciding Officer is convinced that a meaningful

certification decision can be made by DEC without a site-

specific analysis of each mining siie. If DEC can give a

reasonable assurance that an activity will be conducted in

a manner which will not violate water quality standards,

then a proper certification has been performed. Whether

the actual approach used by DEC satisfies the require-

ments of reasonable assurance is discussed infra in Sec-

tion C(4).

3. Review of NPDES Permit Applications and Tri-

Agency Forms

An argument is made by the requestors that the

failure of DEC to review the NPDES permit applications

and the state Tri-Agency forms renders DEC’s certifica-

tion decision invalid. The argument seems to be that

these forms had meaningful site-specific information

which would allow DEC to perfortn a site-by-site anal-

ysis, and that for DEC to fail to review such information

App. 63

renders its certification -decision invalid. The Deciding

Officer does not think this argument has merit.

The NPDES permit application, which is also known

as the “Short Form C”, and the Tri-Agency form do not

provide sufficient meaningful information to allow DEC

to perform a site-specific analysis. The Short Form C is

filled out by the miner and the accuracy of the informa-

tion on the form is questionable. The data is not field-

checked for accuracy, and the data does not provide

sufficient information to calculate water quality. The

information on the Tri-Agency form is no more helpful or

reiiable.

The Deciding Officer has already determined that a

site specific analysis is not required before the DEC’s

certification action. There is no valid reason why a certi-

fication decision should be invalid simply because DEC

did not review two general forms which had been sub-

mitted by the miner. Certainly, the failure to review gen-

eral forms does not by itself render a certification

decision arbitrary or capricious.

4. Reasonableness of .2 ml/las an Effluent Limitation for

Settleable Solids

An argument has been made that an effluent limita-

tion of .2 ml/I1 for settleable solids will not provide rea-

sonable assurance of compliance with water quality

standards. The Deciding Officer does not think that any

requestor has sustained its burden of proof on this issue,

and consequently this argument is rejected.

App. 64

The evidence indicates that, to meet the permit’s .2

ml/1 limit, a miner must use a properly designed, con-

structed and maintained settling pond. The evidence also

indicates that such a settling pond will produce effluent

with settleable solids concentrations of .1 ml/I or less.

Furthermore, a placer miner who meets the .2 m1/] settle-

able solids effluent limit will have in-stream settleable

solids levels of less than .1 ml/1, which is the minimum

detectable limit. Such a level of settleable solids clearly

satisfies the state water quality standard of “no measur-

able increase.”

The .2 ml/I effluent limitation is very close to the

minimum detectable level for settleable solids. If one

takes into account the excess water bypass provision in

the draft permit as well as the out-of-stream settling pond

requirement, the .2 ml/] limitation is a reasonable limita-

tion. If one further takes into account in-stream dilution

and increased treatment efficiency, the .2 ml/1 limitation

becomes even more reasonable as a limitation which will

assure compliance with water quality standards.

One can make additional observations about the

appropriateness of the .2 ml/I limitation. There will be

some infiltration dilution in placer mining operations.

Furthermore, the .2 ml/1 limitation is an instantaneous

maximum. That is, the effluent can never exceed .2 ml/]

at any time during the operation of a mining site. It is

reasonable to assume that the effluent quality for settle-

able solids will generally be below .2 ml/] rather than

right at .2 ml/1.

When these assumptions are made, and the evidence

presented at the hearing indicates that these assumptions

App. 65

are in fact reasonable ones, the .2 ml1/I effluent limitation

for settleable solids clearly is a reasonable one. The evi-

dence indicates that DEC is able to say with confidence

that such a limitation will reasonably assure compliance

with water quality standards.

TFA has argued that if one does not do a site-specific

verification for settleable solids in effluent, then only an

effluent limit of .1 ml/1 will assure compliance with water

quality standards. The assumptions underlying such an

approach are not reasonable. While .1 ml/1 will by defini-

tion assure that in every case there is no measurable

increase in settleable solids concentrations above natural

background, it is not necessary for the limitation to be

that low to reasonably assure no measurable increase.

TFA’s argument assumes a worst case scenario in every

case and ignores some reasonable assumptions about

dilution, pond performance, and instantaneous maxi-

mums. The evidence presented at the hearing indicates

that TFA’s argument is not correct when applied to the

real world and actual mining sites.

Dilution, instantaneous maximum considerations,

actual performance of settling ponds - all these factors

help to insure that the .2 ml/I limitation will assure

compliance with the water quality standards. TFA has

argued that if the effluent limitation is not at .1 ml/I or

lower, then it is possible under some circumstances tha

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