Fairfield Cnty. Bd. of Comm’rs v. Nally, 34 N.E.3d 873 (Ohio 2015) (holding that a new Total Maximum Daily Load for pollutant discharges into a watershed was a rule as defined under the Ohio Administrative Procedure Act and, as such, should have been properly promulgated to afford interested parties their rights to notice and be heard before the rule’s submission to the U.S. Environmental Protection Agency for approval).

The Federal Water Pollution Control Act, or Clean Water Act, seeks to restore and maintain the integrity of U.S. waters through (i) technology-based effluent limitations on “point sources” discharging pollutants; and (ii) water-quality standards for protecting the use of identified water bodies. The Clean Water Act also requires each state to identify waterways that are too impaired to implement applicable water-quality standards and then rank waterways based on pollution severity. States must then develop a Total Maximum Daily Load (TMDL), which establishes a maximum amount of the specified pollutant that may be discharged into the waterway without violating water-quality standards. Once the U.S. Environmental Protection Agency (“EPA”) approves a state’s TMDL, the state must implement that TMDL.

Pursuant to these requirements, the Ohio Environmental Protection Agency (“Ohio EPA”) developed a document in 2005 called the “Total Maximum Daily Loads for the Big Walnut Creek Watershed” (“TMDL report”), which the EPA subsequently approved. Using stream-survey data from 2000 of Blacklick Creek—one of the 54 “stream segments” in the Big Walnut Creek watershed—the report put forth new phosphorous discharge limits for Blacklick Creek. The Tussing Road Water Reclamation Facility (“Tussing Road plant”), owned by Fairfield County (“the county”), is one of the sources subject to the report’s new limitation. In 2006, the county applied for and received a renewed National Pollutant Discharge Elimination System (“NPDES”) permit for the Tussing Road plant. The new permit included the TDML-derived phosphorous discharge limitation.

The county appealed this limit to the Environmental Review Appeals Commission (“ERAC”), which found that while the Ohio EPA had a valid basis for imposing the limit, it failed to consider whether such a limit was feasible. Thus, the ERAC vacated the phosphorous limit and remanded the case to the Ohio EPA. Subsequently, the county appealed the ERAC’s finding that the Ohio EPA had a valid foundation for imposing the limit, and the Ohio EPA cross-appealed (asserting that the TMDL had been federally approved and that federal law required Ohio EPA to set the phosphorous limit). The Tenth District Court of Appeals (“lower court”) affirmed the ERAC’s order, finding that there was sufficient factual foundation for a phosphorous limitation and rejecting the county’s assertions that the new limitation lacked meaningful review and, therefore, violated due process. The county appealed to the Supreme Court of Ohio (“Court”).

The Court first considered whether the TMDL was a “rule” within the requirements of Chapter 119 of the Ohio Administrative Procedure Act, which defines a “rule” as any “standard, having a general and uniform operation, adopted, promulgated, and enforced by any agency.” Because the TMDL sets a new legal standard—applied by the Ohio EPA—to “all current and future dischargers in the Big Walnut Creek watershed,” the Court observed that the limit fell within Chapter 119’s definition of “rule.” Additionally, the Court disagreed with the agency’s argument that the TMDL is merely a tool for implementing its pre-existing legal obligation. Examining the consequences of a TMDL, the Court determined that even though the Ohio EPA allocated limits individually to different point sources, the same standards and procedures applied to each; thus, the TMDL had “general and uniform effect.” Finally, the Court noted that the TMDL creates new legal obligations. The results of the TMDL development process were new mandatory loading reductions rather than “mere enforcement of compliance with existing authority,” as argued by the Ohio EPA. Thus, the Court held this indicated that the TMDL was indeed a rule subject to rulemaking procedures.

The Court then addressed the county’s second argument—that the TMDL itself establishes a new water-quality standard and therefore requires rulemaking procedures. Previously, the Ohio EPA had promulgated a narrative standard for phosphorous in the Ohio Administrative Code, requiring limitations on phosphorous “to the extent necessary to prevent nuisance growths of algae, weeds, and slimes that result in a violation of water quality criteria.” However, the TMDL imposes a numeric limit for phosphorous for all water bodies in the Big Walnut Creek watershed. The Court found that this new numeric limit constituted a water-quality standard; therefore it should have been first promulgated as a rule under Chapter 119.

Because the TMDL was a rule, the Court held that the Ohio EPA should have complied with Chapter 119’s rulemaking procedures, which include providing public notice, an opportunity for public comment, and a public hearing before using the TMDL-derived target in an NPDES permit. The Court found that while the Ohio EPA did make a draft of the TMDL available for public review before submission to the EPA, that act alone did not satisfy the rulemaking procedural requirements. Because agencies must give the public certain due process rights before a rule attains final federal approval, the Court held that Ohio EPA’s failure to do so ultimately deprived NPDES permit holders of their rights to notice and be heard regarding the rule.

Accordingly, the Court affirmed the lower court’s judgment, vacating the new phosphorous standard and remanding the cause to the Ohio EPA.

Justice O’Donnell concurred as to the ruling, but agreed with the court of appeals’ reasoning. Justice O’Connell observed that the Ohio Administrative Code allows water-quality standards to be either numeric or narrative in nature, and the Ohio EPA had already promulgated the narrative standard for phosphorous limits (quoted above). Because TMDLs merely provide the factual and technological data needed to implement Ohio water-quality standards, Justice O’Donnell argued that TMDLs are not administrative rules and need not be promulgated as such. In O’Donnell’s view, TMDLs are not legal standards, but objective, factual determinations that the Ohio EPA makes to interpret and implement the water-quality standards. Accordingly, Justice O’Donnell would affirm the court’s ruling on the grounds that the Ohio EPA did not challenge the lower court’s determination that the Ohio EPA failed to consider the technical feasibility and economic reasonableness of the limit, rather than the Court’s ruling that the TMDL was a rule.

Katy Rankin

Image: Turtle Pond Panorama, Three Creeks Metro Park, where Big Walnut Creek is joined by its principal tributaries Alum Creek and Blacklick Creek, Columbus Ohio.  Flickr user Raymond Wald, Creative Commons.