The opinion of the court was delivered by: P. Kevin Brobson, Judge
Argued: September 13, 2010
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE JIM FLAHERTY, Senior Judge OPINION BY JUDGE BROBSON
In these consolidated petitions for review, petitioners Upper Gwynedd Towamencin Municipal Authority (UG) and Lower Salford Township Authority (LS) (collectively, where appropriate, "the Authorities") challenge orders of the Environmental Hearing Board (EHB) relating to the Authorities' applications for recovery of attorneys' fees and costs (fee applications) from the Department of Environmental Protection (DEP). EHB (1) denied the Authorities' fee applications under Section 307(b) of the Clean Streams Law (Law),*fn1 and (2) denied the Authorities' request for reconsideration of EHB's order denying their fee applications.
I. BACKGROUND A. Statutory Background This matter arises under Section 303(d) of the federal Clean Water Act (Act), 33 U.S.C. § 1313(d), which provides in pertinent part: (d) Identification of areas with insufficient controls; maximum daily load; certain effluvient limitations revision. (1) (A) Each State shall identify those waters within its boundaries for which the effluent limitations required by section 301(b)(1)(A) and section 301(b)(1)(B) are not stringent enough to implement any water quality standard applicable to such waters . . . (C) Each State shall establish for the waters identified in paragraph (1)(A) of this subsection, and in accordance with the priority ranking, the total maximum daily load, for those pollutants which the Administrator identifies under section 304(a)(2) as suitable for such calculation. Such load shall be established at a level necessary to implement the applicable water quality standards with seasonal variations and a margin of safety which takes into account any lack of knowledge concerning the relationship between effluent limitations and water quality . . . .
(2) Each State shall submit to the Administrator from time to time, with the first such submission not later than one hundred and eighty days after the date of publication of the first identification of pollutants under section 304(a)(2)(D), for his approval the waters identified and the loads established under paragraphs (1)(A), (1)(B), (1)(C), and (1)(D) of this subsection. The Administrator shall either approve or disapprove such identification and load not later than thirty days after the date of submission. If the Administrator approves such identification and load, such State shall incorporate them into its current plan under subsection (e) of this section. If the Administrator disapproves such identification and load, he shall not later than thirty days after the date of such disapproval identify such waters in such State and establish such loads for such waters as he determines necessary to implement the water quality standards applicable to such waters and upon such identification and establishment the State shall incorporate them into its current plan under subsection (e) of this section. (Emphasis added.)
Thus, the Act vests with each state numerous responsibilities, including the establishment of water quality standards for bodies of water within the boundaries of the state. The Act requires states first to evaluate the use of a body of water. Based upon the particular use of a body of water, such as recreation or consumption, the state must then determine the water quality standards the body of water must meet in order to serve the designated use.*fn2 Part of the evaluation of these standards involves determining the maximum amount of various pollutants the body of water may contain before its designated use is impaired.*fn3 The amount of permitted effluents is referred to as "total maximum daily load" or TMDLs.
Section 303(d) of the Act, which is at issue in this case, requires states to perform two key functions: (1) to create a list of bodies of water within a state that do not meet established water quality standards-a "303(d) list," which the Environmental Protection Agency (EPA) may approve or disapprove; and (2) to establish, for each body of water on its 303(d) list, TMDLs. As with the 303(d) list, EPA has the power to approve or disapprove a state-established TMDL for a particular body of water. Under Section 303(d) of the Act, EPA must establish a TMDL if it disapproves a state-established TMDL.
B. Historical Background Regarding Pennsylvania's Compliance with the Requirements of Section 303(d) of the Act In January 1996, the American Littoral Society and the Public Interest Research Group of Pennsylvania filed a complaint in the United States District Court for the Eastern District of Pennsylvania. (See Consent Decree; Lower Salford Township Authority Reproduced Record (L.S.R.R.) at 295a-331a.) The lawsuit sought to challenge the alleged failure of EPA to comply with its responsibilities under Section 303(d) of the Act. (Id.)
The parties in that case reached an agreement, the terms of which were incorporated into a Consent Decree. (Id.) The Consent Decree set forth a process by which EPA could ensure compliance with the Act's directive for the identification of bodies of water for placement on the 303(d) list and the establishment of TMDLs for those water ways. (Id.)The Consent Decree appears to provide broad power to EPA to establish TMDLs when a state has been unable to or is incapable of establishing TMDLs. (Id.)
In 1997, as a means of complying with its responsibilities under the Consent Decree with regard to Pennsylvania, EPA entered into a Memorandum of Understanding (MOU) with DEP. (L.S.R.R. at 507a-512a.) The MOU acknowledged that DEP has lead responsibility under Section 303(d) of the Act to identify bodies of water to be placed on the 303(d) list and to establish TMDLs.
(L.S.R.R. at 508a, Preamble to MOU.) The MOU also provides that "DEP, subject to available resources, will use its best efforts to work with EPA to establish required TMDLs for [bodies of water on the list] within ten years of the execution [of the MOU]." (L.S.R.R. at 509a; MOU, Section IV(C).) Further, the MOU provides that "DEP's performance of Section IV(C) is contingent on EPA providing DEP the necessary assistance to enable DEP to become technically proficient . . . to prepare TMDLs." (L.S.R.R. at 509a; MOU, Section IV(E).) Section IV(F) of the MOU is also significant in that it provides that "[a]t the request of EPA, DEP will share any existing and readily available water quality related data with EPA to assist EPA in establishing TMDLs for [303(d) water ways]." Id. (Emphasis added.) These provisions of the MOU demonstrate that, although EPA and DEP understood the primary roles the Act vests with states, DEP and EPA anticipated that circumstances might warrant EPA's assuming the primary responsibility for establishing TMDLs.*fn4
C. The Issuance of the TMDLs for Skippack Creek A document identified as "Total Maximum Daily Load for Skippack Creek" (hereafter EPA TMDL Document) indicates that the TMDLs set forth in the document were "established April 8, 2005." (L.S.R.R. at 2a-219a.) The EPA TMDL Document, generated by EPA, is signed on the front page by Jon Capacasa, as Director of the Water Protection Division of EPA, Region III.*fn5 (L.S.R.R. 2a.) The EPA TMDL Document includes sections identifying problems, assessment of sources of pollutants, sediment TMDL development, and nutrient TMDL development for Skippack Creek. The EPA TMDL Document also refers to and includes a report generated by Hunter J. Carrick, Ph.D., suggesting certain limits on phosphorous for the Skippack Creek and the consequences of such limits on algal and nuisance growth. The report indicates that Dr. Carrick submitted the report to DEP on December 11, 2004. (EPA TMDL Document, Appendix D-6.; U.G.R.R. at 234a.)
D. Procedural Background Following the issuance of the EPA TMDL Document, the Authorities filed an appeal with EHB, naming DEP as respondent and challenging the TMDLs in the EPA TMDL Document. (L.S.R.R. at 267a-291a; U.G.R.R. at 299a-323a.) The Authorities made various averments in their appeals, including a reference to public hearings that "were held" in February 2005. UG averred that "[DEP] received timely comments from various members of the public" in response to draft TMDLs for Skippack Creek. (U.G.R.R. at 304a.) We note, however, that the EPA TMDL Document provides:
EPA regulations require that the public must be allowed 30 days to review and comment prior to establishing a TMDL," and that "[a] public meeting was conducted on February 16, 2005 . . . at the Skippack Township Building. During the meeting EPA presented details and answered questions regarding the proposed . . . TMDLs. Based on the inputs from interested parties and the general public on the proposed TMDL document, EPA has addressed all comments and revised the TMDL report. (EPA TMDL Document; U.G.R.R. at 218a; emphasis added.)
The Authorities' appeals also included averments relating to EHB's purported jurisdiction, stating that EHB has jurisdiction over DEP "actions," and that, although the establishment of TMDLs bore characteristics of both a regulation and administrative "action," the establishment of TMDLs affected the Authorities' property rights and thereby provided EHB with jurisdiction over the appeal.
(L.S.R.R. at 273a.) In fact, the Authorities claimed that, according to DEP, a party could not wait to challenge the methodology used to develop TMDLs in the course of a National Pollution Discharge Elimination System (NPDES) permit*fn6
proceeding. (L.S.R.R. at 274a.) Consequently, the Authorities argued that the only opportunity to challenge TMDLs (which would govern NPDES permit applications) is an immediate appeal from the decision establishing the TMDLs.
(L.S.R.R. at 274a; U.G.R.R. at 306a.) The Authorities did not indicate whether EPA's final approval authority under Section 303(d) of the Act has any bearing on their position.
The Authorities averred that, despite the existence of the EPA TMDL Document, DEP, not EPA, actually established the TMDLs for Skippack Creek.
(L.S.R.R. at 274a.) In making this claim, the Authorities pleaded facts indicating that the EPA TMDL Document described or established DEP's participatory role. Specifically, DEP employees were involved with the development of the TMDLs, DEP collected data (including information from a DEP "Nutrient Database") incorporated into the TMDL, and DEP made decisions regarding certain aspects of the development process such as sampling locations and TMDL "endpoints" and the "QUAL2K Model" used for nutrient TMDLs. Moreover, DEP's assessment of algal growth and determination of TMDL endpoints were critical in the development of the TMDLs. The Authorities' appeal also placed great significance on Dr. Carrick's report, because Dr. Carrick submitted the report to DEP, and the conclusions in his report regarding phosphorous concentrations provided a significant basis for the established TMDLs. (L.S.R.R. at 274a-280a.)
The Authorities made several other legal arguments in support of their position, urging that, even if EPA had actually issued the TMDLs, (1) the "actions" DEP took in participating in the process meant that EHB has the power to alter the established TMDLs (despite EPA's ultimate responsibility to approve TMDLs); (2) the establishment of the TMDLs, by operation of law, resulted in the incorporation of the TMDLs into DEP's "Continuing Planning Process" (CPP), and the CCP will affect the Authorities' rights; and (3) DEP has purportedly acknowledged in a Pennsylvania Bulletin notification that the TMDLs, whether established by DEP or EPA, constitute an "action" of DEP based upon the argument that DEP stated in a Pennsylvania Bulletin notification, which provided that EPA's completion of the work on the TMDLs, and EPA's approval of the TMDLs, satisfied DEP's obligations under the Act. (L.S.R.R. at 280a-285a, specifically Para. 43 (C)(1)-(8).)
With regard to the merits, the bulk of the Authorities' claim challenging the TMDLs rested on alleged problems in Dr. Carrick's analysis, which EPA (and/or DEP) used in the development of at least some of the TMDLs.
In response to the appeal, DEP filed a Motion to Dismiss, arguing that EHB did not have jurisdiction. DEP argued that it was EPA action, pursuant to the Consent Decree, that established the TMDLs, not a DEP action. EHB denied the Motion to Dismiss on October 24, 2005, concluding that factual issues remained ...