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Maryland Department of Environment v. County Commissioners of Carroll County

Court of Appeals of Maryland

August 6, 2019

Maryland Department of the Environment
v.
County Commissioners of Carroll County, Maryland Frederick County, Maryland
v.
Maryland Department of the Environment

          Argued: September 13, 2018

          Circuit Court for Carroll County Case No. 06-C-15-068141

          Circuit Court for Frederick County Case No. 10-C-15-000293

          Barbera, C.J., Greene [*] Adkins*, McDonald, Watts, Hotten, Getty, JJ.

          OPINION

          McDONALD, J.

         In the quest to conserve a vital resource - the nation's waters - Congress has enlisted the federal, state, and local governments under the Clean Water Act ("the Act")[1] in a regulatory approach sometimes called "cooperative federalism." This effort involves a type of regulation that takes the form of a "permit" issued by a federal agency (or a state agency with federal oversight) at specified intervals to the regulated entity. Such permits authorize discharges of pollution into waterways, which the Act otherwise prohibits. When the targeted pollution is in stormwater, the permittee - i.e., the regulated entity - is often a local government. Inevitably, as in any assignment of responsibility for solving a serious problem, there is disagreement as to the solution and the allocation of that responsibility. One way to resolve such disputes is through judicial review of the permit.

         This consolidated appeal concerns judicial review of the most recent permits issued to Carroll County and Frederick County ("the Counties") under the Act and a parallel Maryland regulatory scheme. The permits regulate the discharge of polluted stormwater into waterways in the Chesapeake Bay watershed. The permits were developed and issued by the Maryland Department of the Environment ("Department") under the supervision of the United States Environmental Protection Agency ("EPA"), as part of an EPA-led, multi-state effort to restore the Chesapeake Bay in compliance with the Act.

         Both Counties raise serious issues concerning the scope of the permits, the level of effort required of each County, the classification of the Counties (which affects certain conditions in the permits), and the absence or inclusion of certain terms in the permits. Ultimately, we hold that the Department did not exceed its authority under State and federal law when it issued the permits, nor did it act arbitrarily or capriciously in including the challenged terms in the permits.

         I Background

         A. The Clean Water Act and Stormwater Controls for the Chesapeake Bay

         The Chesapeake Bay lies between the western and eastern shores of Maryland and Virginia. As a recent federal court opinion has noted, its name derives from the Algonquin word for "great shellfish bay" Norfolk Southern Railway Co v City of Roanoke, 916 F.3d 315, 323 (4th Cir 2019) (Wilkinson, J, concurring). While the Bay once hosted a quantity of fish and shellfish described as "unbelievable, ... indescribable, and ... incomprehensible," that is no longer the case and "[i]nstead of fish, we quantify phosphorus, nitrogen, sediment, and other pollutants" that threaten the health of the Bay's marine life. Id.

         The watershed of the Chesapeake Bay - the land from which water drains into it - covers about 64, 000 square miles in six states and the District of Columbia ("the Bay States"), and extends from Cooperstown, New York, to Norfolk, Virginia. Pollution from that region contaminates the waters that feed the Bay and ultimately the Bay itself. "Restoring damaged waters like the Chesapeake Bay requires sustained effort, entailing cooperation and coordination among the federal government, state and local governments, the enterprise of the private sector, and all the people who make this region their home." Norfolk Southern, 916 F.3d at 323 (internal quotation marks and citation omitted).

         Federal, state, and local governments have spent decades devising programs to reduce the pollution that enters the Bay. This appeal concerns one such program. In any effort to describe a complex regulatory regime, overseen by various government agencies, one inevitably must become familiar with the concepts, jargon, and acronyms that define that effort. We begin with an overview of the key elements pertinent to this appeal.

         Where Pollutants Come From - Point and Nonpoint Sources

         An important distinction for purposes of the Clean Water Act is the difference between "point sources" and "nonpoint sources" of water pollution. Point sources are discrete and localized, like a pipe carrying discharges from a factory or wastewater treatment plant.[2] Nonpoint source pollution, by contrast, comes from dispersed areas like farms or fields where water runs off the land without being collected or channeled into a point source.[3] This distinction matters for purposes of the Act because the federal statute regulates point sources of water pollution but does not directly regulate nonpoint sources.

         Discharge Permits

         The Act generally prohibits "any person"[4] from discharging pollutants from a point source into a waterway.[5] 33 U.S.C. §1311(a). Accordingly, the statute requires a permit for the discharge of pollutants into a water body from a point source under specified conditions. The Act establishes the National Pollution Discharge Elimination System ("NPDES") to govern such permits. 33 U.S.C. §1342. The EPA is authorized to issue and enforce these permits. 33 U.S.C. §§1319, 1342(a)(1). The EPA may also delegate that authority to a state so long as the state's law establishes a parallel permitting program consistent with the Act. 33 U.S.C. §1342(b). The EPA has delegated such authority to most states, including Maryland.[6]

         Each discharge permit in Maryland is issued under the Act and under a parallel State program. See Maryland Code, Environment Article ("EN"), §9-322 et seq.; COMAR 26.08.04.07. Under Maryland law, the Department is the agency designated to issue and enforce these permits. EN §9-253; COMAR 26.08.04.01. Permits are generally issued for fixed terms of five years or less, subject to renewal. See 33 U.S.C. §1342(b)(1)(B); EN §9-328(b). As a general rule, the Act prohibits subsequent permits from containing "less stringent" conditions than the conditions in the previous permit - sometimes referred to as the "anti-backsliding prohibition" in the Act. 33 U.S.C. §1342(o).

         The Act does not require permits for nonpoint sources or otherwise directly regulate them. Accordingly, the EPA does not regulate those sources of water pollution. States may do so through their own regulatory programs, as Maryland has done.[7] The Act authorizes federal grants to assist the states in such efforts. 33 U.S.C. §1288.

         Pollution Controls in Permits - Water Quality Standards and Effluent Limitations

         Under the Act, "water quality standards" are the benchmark for clean water. For each water body covered by the Act, states submit water quality standards to the EPA for review and approval.[8] The standards are to be based on the water body's "designated use" (e.g., public water supply, fishing, recreational use) and include criteria necessary to support that use (e.g., specific limits on certain pollutant concentrations). See 33 U.S.C. §1313(c)(2)(A); 40 CFR §§130.3, 131.6; COMAR 26.08.02.01-.03.

         To achieve water quality standards, the Act requires that discharge permits include pollution controls for point sources. 33 U.S.C. §1311(b). The Act calls these controls "effluent limitations" - "effluent" being the material discharged by a point source.[9]Effluent limitations may be "technology based" or "water quality based." See EPA, NPDES Permit Limits, https://perma.cc/L4G6-24K9; Natural Resources Defense Council v. EPA, 808 F.3d 556, 563 (2d Cir. 2015).

         Technology based effluent limitations are generally the first round of controls in the effort to achieve water quality standards. See 33 U.S.C. §1311(b)(1)(A). They "represent the minimum level of control that must be imposed in a permit[.]" 40 CFR §125.3(a). But even the most stringent technology based effluent limitations have not achieved water quality standards in thousands of the nation's waterways.[10] Congress anticipated this possibility in 1972 by retaining water quality standards "as a supplementary basis for effluent limitations … so that numerous point sources, despite individual compliance with effluent limitations, may be further regulated to prevent water quality from falling below acceptable levels." EPA v. California ex rel. State Water Resources Control Board, 426 U.S. 200, 205 n.12 (1976). If technology based limitations do not achieve the water quality standards, permits may include "any more stringent limitation ... necessary to meet water quality standards" - i.e., "water quality based effluent limitations." 33 U.S.C. §1311(b)(1)(C); 40 CFR §130.7(c).[11] Thus, regardless of whether a waterway is over-polluted due to point sources, nonpoint sources, or some mixture of both, the Act authorizes the imposition of water quality based controls on point sources, in addition to the most stringent technology based controls.[12]

         These two types of effluent limitations differ in their reference point and in their strategies for reducing pollution.[13] For technology based limitations, the reference point is the source, and the strategy is to deploy pollutant-reducing technology at that source regardless of its contribution of pollutants to the waterway. By contrast, for water quality based effluent limitations, the reference point is the waterway, and the strategy is for the point source to implement any additional actions (beyond the already required technologies) necessary to achieve the applicable water quality standard.[14]

         The Point Sources Here - Municipal Separate Storm Sewer Systems (MS4s)

         This appeal concerns permits for a type of point source known as a "municipal separate storm sewer system" ("MS4").[15] An MS4 is a network of conveyances (including storm drains, gutters, and other drainage systems) designed to carry only stormwater (as opposed to a "combined sewer system" that conveys both sanitary sewage and stormwater). 40 CFR §122.26(b)(8).

         MS4s differ from typical "end-of-pipe" point sources in certain respects. A common point source, such as a pipe that discharges waste from a factory, usually discharges a known and finite set of pollutants from a specific location. By contrast, stormwater picks up various pollutants as it flows across widely dispersed areas, including paved (or "impervious") surfaces, on its way to one of the many conveyances that make up an MS4, and then into a waterway. The quantity of stormwater that flows through these conveyances into a waterway can vary unpredictably depending on the weather, any development of the land (e.g., whether the land is paved), and other activities on the land (e.g., litter, use of lawn fertilizers).

         Given these differences between an MS4 and a typical point source like a factory, a discharge permit for an MS4 differs from that for a typical point source. A discharge permit for a typical end-of-pipe point source usually sets numeric limits as effluent limitations for the known set of pollutants discharged from that pipe.[16] Using that same approach for an MS4 would entail setting effluent limitations for each conveyance within the stormwater drainage system, which would be administratively, technically, and financially burdensome.[17] Instead, an MS4 permit generally requires the permittee to implement flexible management programs designed to reduce the pollution introduced into stormwater, thereby limiting the amount of pollution discharged into the waterway.[18] In the language of the Act, an MS4 permit is to include "controls to reduce the discharge of pollutants to the maximum extent practicable, including management practices, control techniques and system, design and engineering methods, and such other provisions as the [EPA] or the State determines appropriate for the control of such pollutants." 33 U.S.C. §1342(p)(3)(B)(iii).

         Implementation of the MS4 Permit Requirement - Phase I and Phase II

         The Act and related EPA regulations have applied the permit requirement to MS4s in two phases. The first phase ("Phase I") took effect during the period 1987-94 and included stormwater systems that were serving more heavily populated areas - dubbed "large" and "medium" MS4s - and those that were contributing to the failure of a water body to meet water quality standards, irrespective of the size of the population served. See 33 U.S.C. §1342(p)(2); 40 CFR §122.26(b). Subsequently, a second phase ("Phase II") covered "small" MS4s. See 33 U.S.C. §1342(p)(5)-(6); 40 CFR §122.34. As a general rule, permits for MS4s included in Phase I have been subject to an earlier timetable and more stringent conditions than permits for MS4s included in Phase II.

         Total Maximum Daily Load (TMDL)

         An important element in determining the conditions that appear in a discharge permit is what is known as the "total maximum daily load" - or "TMDL." The Clean Water Act does not define this phrase, but describes it as the "level" of a pollutant that a water body can tolerate without violating applicable water quality standards. 33 U.S.C. §1313(d)(1)(C). In practice, the acronym "TMDL" has come to refer to more than just a numeric measure of a pollutant. It has also come to refer to the process and calculations used to determine that level of a pollutant and its allocation among sources of the pollutant. The document in which an agency calculates the TMDL, in the sense of a numeric measure of a pollutant, and allocates that level among various sources of pollution is also sometimes referred to as a "TMDL." A singularly complex example pertinent to this case is what is referred to as the Chesapeake Bay TMDL ("Bay TMDL"), [19] which is discussed in greater detail below.

         The EPA has elaborated on the meaning of TMDL as a numeric measure of pollution in its regulations. The term "load" refers to a measure of water pollution. See 40 CFR §130.2(e) (defining "load" as "[a]n amount of matter or thermal energy that is introduced into a receiving water"). The phrase "total maximum daily load" or "TMDL" is defined in regulation as "the sum of" amounts of the relevant pollutant emanating from various point and nonpoint sources together with a "natural background" amount of the pollutant and a "margin of safety." 40 CFR §§130.2(i), 130.7(c)(1). A TMDL, in this sense, "can be expressed in terms of either mass per time, toxicity, or other appropriate measure…." 40 CFR §130.2(i). To understand this definition of TMDL as a numeric measure requires an understanding of the TMDL process.

         The TMDL process is based on the direction in the Act that each state identify waterways for which technology based effluent limitations are not achieving water quality standards.[20] 33 U.S.C. §1313(d)(1)(A). If water quality standards are not being met in a waterway due to excess levels of a particular pollutant, the state is to determine the maximum amount of that pollutant that the waterway can receive without violating water quality standards - i.e., the TMDL for that pollutant as to that waterway. 33 U.S.C. §1313(d)(1)(C). The resulting TMDL - as a cap on the pollutant - is sometimes referred to as a "pollution budget" or "pollution diet." E.g., Norfolk Southern, 916 F.3d at 324; Conservation Law Foundation v. EPA, 964 F.Supp.2d 175, 179 (D. Mass. 2013).

         The EPA's regulations recognize that, in order for a state to calculate the maximum level of a pollutant that a waterway can tolerate without violating water quality standards, a state agency must conduct a complex scientific analysis. The state agency must consider, among other things, the relationship between the water quality standards and the level of the pollutant in the waterway, the various sources of the pollutant, and the extent to which each source contributes to the violation of water quality standards. See 40 CFR §130.7(c). As indicated earlier, in developing the TMDL for that pollutant, the agency must also factor in "seasonal variations and a margin of safety which takes into account any lack of knowledge concerning the relationship between effluent limitations and water quality." 33 U.S.C. §1313(d)(1)(C).

         Once the agency produces its best estimate of the maximum pollutant level consistent with water quality standards - i.e., the TMDL in the sense of a numeric measure of pollution - it must then apportion that amount to the relevant sources of that pollution while allowing for the margin of safety required by the Act. See 40 CFR §§130.2(i), 130.7(c). The portion assigned to each relevant point source is called a "wasteload allocation." 40 CFR §130.2(h). The portion assigned to each nonpoint source is called a "load allocation." 40 CFR §130.2(g). In all, therefore, the TMDL - in the sense of a numeric amount - for a given pollutant for a particular waterway is the sum of the wasteload allocations, the load allocations, the natural background, and the margin of safety. 40 CFR §§130.2(i), 130.7(c)(1). After a state has determined a TMDL for a particular pollutant with respect to a particular waterway, it is to be submitted to the EPA for approval. 33 U.S.C. §1313(d)(2).

         When a state submits a TMDL to the EPA, the state provides not only the maximum pollutant amount, but also the various wasteload allocations and load allocations, together with an explanation of the calculations that resulted in that maximum amount and the allocations. EPA, Water Quality Planning and Management, 50 Fed. Reg. 1774, 1775 (January 11, 1985) ("it is impossible to evaluate whether a TMDL is technically sound and whether it will be able to achieve [water quality] standards without evaluating component [wasteload and load allocations] and how these loads were calculated"). As indicated earlier, an example of a document that contains the separate TMDLs (in the sense of numeric amounts) for relevant pollutants, explains the reasoning and calculations underlying those caps, and allocates those totals among the relevant sources of pollution is the Bay TMDL.

         A TMDL such as the Bay TMDL is neither self-implementing nor directly enforceable. Rather, it serves as an informational tool that the EPA and the states use in seeking to achieve the specified pollutant levels - and the applicable water quality standards - by means of discharge permits and other regulatory tools. See American Farm Bureau Federation v. EPA, 984 F.Supp.2d 289, 297-98 (M.D. Pa. 2013), aff'd, 792 F.3d 281 (3d Cir. 2015). To enforce the TMDL limits and corresponding water quality standards, agencies that issue discharge permits seek to ensure that the total pollution discharged by point sources does not exceed the wasteload allocations in the relevant TMDLs. The combined pollution allotted to all of the point sources should equal the sum of the wasteload allocations in a TMDL. Therefore, the discharge permit for each point source is to contain water quality based effluent limitations consistent with the "assumptions and requirements" of the wasteload allocation for that source in any applicable TMDL. 40 CFR §122.44(d)(1)(vii)(B).

         A discharge permit may incorporate provisions related to several TMDLs. The permits at issue in this case incorporate provisions not only from the Bay TMDL, but also from TMDLs, developed by the Department and approved by the EPA, for certain waterways.[21] Appendices to the Counties' MS4 permits list the approved TMDLs applicable to each County. One example, which will be discussed later in this opinion, is the TMDL for fecal bacteria in Double Pipe Creek, whose watershed spans both Counties.

         Chesapeake Bay TMDL and Maryland Watershed Implementation Plan (WIP)

         In 2009, after decades of multilateral efforts aimed at restoring the Chesapeake Bay, [22] the EPA began the development of a Chesapeake Bay-wide TMDL.[23] After publishing a draft for a period of public review, the EPA adopted the Bay TMDL in late 2010.[24] The Bay TMDL establishes limits for three pollutants - nitrogen, phosphorus, and sediment - that threaten marine life by feeding large algae blooms that block sunlight and reduce oxygen levels in the water.[25] Bay TMDL at 2-6, 2-7. Specifically, the Bay TMDL pollutant caps are designed to satisfy water quality standards involving "aquatic life uses" and criteria such as water clarity and dissolved oxygen levels. Id. at 3-1, 3-2.

         Given the breadth and complexity of the Bay TMDL, the EPA established a unique accountability framework to achieve its goals. Bay TMDL at ES-8. Although the Act generally does not require an implementation plan for a TMDL, the EPA directed each Bay State to create a "Watershed Implementation Plan" ("WIP") to reduce pollution to the levels set by the Bay TMDL. Each Bay State's WIP serves two basic purposes - to break down the EPA's statewide Bay TMDL pollutant allocations among geographic areas and among point and nonpoint sources within the state, and to identify the programs and policies that the state will use to achieve those pollutant reductions. The Maryland WIP was developed by the Department together with the Departments of Planning, Agriculture, and Natural Resources. Maryland's Final Phase I Watershed Implementation Plan (Dec. 3, 2010), available at https://perma.cc/8CMV-ENCB ("Maryland WIP").[26] Like the other Bay State WIPs, the Maryland WIP functions as a "roadmap" for how and when the State will reach the pollution reduction goals set forth in the Bay TMDL. Maryland Department of the Environment v. Anacostia Riverkeeper, 447 Md. 88, 109 (2016).

         Implementing the Maryland WIP in MS4 Permits

         The Maryland WIP listed several requirements to be included in the then-upcoming round of Phase I MS4 permits in Maryland. Two of these requirements correspond to terms in the Counties' permits that are part of the dispute in this litigation.

         First, a commitment in the Maryland WIP involves restoration of impervious surfaces - i.e., areas that have been paved or otherwise developed, as opposed to natural, undeveloped areas. Natural areas allow stormwater to soak into the ground, where pollutants are filtered to some extent. Impervious surfaces prevent that filtration process. Instead, stormwater that encounters an impervious surface rushes over it, collecting pollutants along the way. To "restore" an impervious surface is to make it function more like a natural terrain that absorbs and filters rain water. Doing so accomplishes the same end as a direct pollutant control, like a filter or other cleansing mechanism attached to a conveyance. The less impervious surface that exists, the less polluted stormwater will run across it and into the conveyances of the MS4. Thus, as is true in general for stormwater management programs in MS4 permits, an impervious surface restoration requirement serves as a surrogate for direct pollution controls. See Anacostia Riverkeeper, 447 Md. at 122-23. The Maryland WIP called for "[c]ompletion of restoration efforts for twenty percent of the [Phase I MS4] counties' impervious surface area that is not already restored to the maximum extent practicable." Maryland WIP at 5-30.

         Second, another provision of the Maryland WIP refers to many applicable local TMDLs with stormwater wasteload allocations. For example, for the Counties, the relevant local TMDLs are compiled, as mentioned above, in appendices to their MS4 permits. The Maryland WIP requires the creation of "[s]tormwater watershed implementation plans for each EPA approved stormwater wasteload allocation" in the relevant local TMDLs. Maryland WIP at 5-30. Such local watershed implementation plans are distinct from the overall Maryland WIP.

         Maryland Stormwater Management Act

         In addition to the permitting program, the State Stormwater Management Act has, since the mid-1980s, required local jurisdictions to implement stormwater management programs "to reduce as nearly as possible the adverse effects of stormwater runoff." EN §4-201. Each county and municipality is to adopt ordinances necessary to implement such a program consistent with State law. EN §4-202. The Legislature directed the Department to adopt regulations governing such programs that would, among other things, indicate that the primary goal is "to maintain after development, as nearly as possible, the predevelopment runoff characteristics." EN §4-203(b)(1); see also Anacostia Riverkeeper, 447 Md. at 110-13. The statute authorizes jurisdictions to impose and collect stormwater remediation fees and other charges to carry out such programs. EN §§4-202.1, 4-204; see also 96 Opinions of the Attorney General 61 (2011). Such fees provide "important revenue needed to offset the costs of building and maintaining municipal gutters and drains, monitoring pollution levels, policing illegal discharges of polluted water, and educating the public on proper environmental practices." Norfolk Southern, 916 F.3d at 325 (referring to similar local stormwater fee in Virginia).

         The Carroll County and Frederick County MS4 Permits

         The Department first issued MS4 permits to Carroll County and Frederick County during the 1990s as part of Phase I of the MS4 permitting process, and has renewed those permits several times since then. The permits that are the subject of this case are Carroll County's fourth and Frederick County's third round of MS4 permits, which were both issued in December 2014. In accordance with State law, the Department first issued draft permits for public comment. See EN §1-604(a). In each case, the Department held a public hearing and accepted comments on the draft permit. After considering those comments, the Department made a Final Determination to issue each permit together with a document entitled "Basis for Final Determination" that provided an explanation for its action. EN §1-604(b).

         Pertinent to this case, the Maryland WIP commitment involving impervious surface restoration is incorporated into Part IV.E.2.a of each permit. This provision has two components. First, it requires each County to submit to the Department an "impervious surface area assessment" consistent with guidelines provided by the Department. That assessment, if approved by the Department, "shall serve as the baseline for the restoration efforts" required by the permit. Second, by the end of the permit term, each County "shall commence and complete the implementation of restoration efforts for twenty percent of the County's impervious surface area consistent with the methodology described in [a Department guidance document] that has not already been restored to the" maximum extent practicable.

         Part IV.E.2.b of each permit includes a provision based on the commitment in the Maryland WIP concerning local TMDLs. This provision requires each County to submit to the Department for approval a plan to implement each stormwater wasteload allocation in each relevant, EPA-approved local TMDL. Each plan must include a final date for "meeting applicable [wasteload allocations] and a detailed schedule for implementing all [necessary] structural and nonstructural water quality improvement projects, enhanced stormwater management programs, and alternative stormwater control initiatives." Upon approval by the Department, the plans become enforceable conditions of the permits.

         Two other aspects of the permits are at issue here. The first is Part VI.B of each permit, which requires the Counties to cooperate with other State agencies in the development of elements of the Counties' comprehensive growth plans that involve stormwater management. The second contested aspect of the permits is the absence of an authorization for "water quality trading."[27] As relevant here, such trading would allow the Counties to earn credit for pollution reduction by paying others (whether point or nonpoint sources) to take pollution-reducing actions. A County might consider water quality trading in situations where paying another party to achieve a pollution reduction costs less than the County's own efforts to achieve a similar reduction.

         B. Procedural History

         In January 2015, Carroll County sought judicial review of its 2014 MS4 permit in the Circuit Court for Carroll County. At the request of the parties, the matter was stayed for more than a year while the parties pursued settlement and while challenges to similar permits by environmental advocates were being litigated.[28] After the stay expired, the Circuit Court issued an opinion dated June 26, 2017, agreeing with the County on some of its claims and with the Department on others. The court remanded the County's permit to the Department. The Department appealed that ruling and the County filed a cross-appeal.

         In January 2015, Frederick County sought judicial review of its 2014 permit in the Circuit Court for Frederick County. As in the Carroll County case, the matter was stayed pending settlement discussions and other litigation. After the stay expired, the Circuit Court issued an opinion dated July 14, 2017, that largely rejected the County's arguments, but remanded the permit to the Department to address what the court believed were ambiguities and inconsistencies in the permit's wording. Frederick County appealed that ruling.

         The Court of Special Appeals consolidated the two appeals for argument. Prior to argument and decision in the Court of Special Appeals, the Counties asked this Court to grant a writ of certiorari in their respective cases. The Department agreed that the Counties' petitions should be granted. This Court granted the two petitions and consolidated the cases for argument.

         II Discussion

         Both Counties challenge conditions set forth in their most recent MS4 permits, although some of the bases for their challenges differ.

         Two of the alleged flaws in the permits concern the impervious surface restoration requirement. First, Frederick County argues that the Department exceeded its authority under the Clean Water Act by failing to consider "practicability" when it included the impervious surface restoration requirement in its permit. Frederick County bases this argument on a provision of the Act that requires MS4 permits to include controls to reduce pollution discharges "to the maximum extent practicable" - what is sometimes called the MEP standard. Frederick County further argues that, even if the Act allows the Department to set the restoration requirement without regard to the MEP standard, the Department arbitrarily and capriciously failed to consider the County's contention that compliance with the degree of restoration required by the permit is impossible.

         Second, both Counties assert that the Department exceeded its authority under the Act by including in the permit an impervious surface restoration requirement in which the baseline for measuring compliance with the requirement relates to the unrestored impervious surface throughout the entire County, rather than only the area served by the County's MS4.

         Both Counties argue that the Department has unlawfully treated them as Phase I jurisdictions for purposes of their MS4 permits - thereby subjecting them to more stringent permit terms required of Phase I jurisdictions than those later required of Phase II jurisdictions - because it incorrectly classified them in the early 1990s as "medium" jurisdictions based on population. Carroll County also argues that its inclusion in Phase I of the MS4 permitting program was arbitrary and capricious.

         Both Counties argue that the Department arbitrarily and capriciously failed to include water quality trading as a compliance mechanism in their permits.

         Finally, Carroll County argues that a provision in its permit that requires the County to cooperate with other State agencies in the development of stormwater-related aspects of the County's comprehensive growth plan unlawfully imposes new obligations on the County.

         We first discuss the standards that govern our consideration of these arguments. We then consider the substantive issues raised by the Counties.

         A. What and How We Review

         The General Assembly has provided for judicial review of permits issued by the Department, such as the MS4 permits issued to the Counties. EN §1-601(a)(3), (c). Such review is based on an administrative record that includes the various items set forth in EN §1-606(c).[29] Judicial review begins in the circuit court pursuant to the Maryland Rules. See Maryland Rule 7-201 et seq. (governing judicial review of administrative actions when a statute provides for judicial review).

         In an appeal of the circuit court's review of an agency action, an appellate court reviews the agency's action itself rather than the decision of the circuit court. Hollingsworth v. Severstal Sparrows Point, LLC, 448 Md. 648, 654 (2016). Thus, while the circuit court decisions here set the stage for our review and determined who would be appellant and appellee in our Court, we are not assessing the merits of those court decisions. Rather, we directly review the permits in light of the issues raised by the Counties.

         1. Standards for Review of Discharge Permits

         a. General Standards for Review of Agency Action

         The standards for judicial review of a discharge permit - and their corresponding levels of deference to the agency - vary depending on whether the court is reviewing an agency's fact findings, discretionary decisions, or legal conclusions. See Anacostia Riverkeeper, 447 Md. at 118-21.

         Review of Fact Findings

         For fact findings, a reviewing court applies the "substantial evidence" standard, under which the court defers to the facts found and inferences drawn by the agency when the record supports those findings and inferences. Anacostia Riverkeeper, 447 Md. at 120. In particular, with respect to factual issues that involve scientific matters within an agency's area of technical expertise, the agency is entitled to "great deference." Id.

         Review of Matters Committed to the Agency's Discretion

         With respect to matters committed to agency discretion, a reviewing court applies the "arbitrary and capricious" standard of review, which is "extremely deferential" to the agency. Harvey v. Marshall, 389 Md. 243, 296-99 (2005); Spencer v. Md. State Bd. of Pharmacy, 380 Md. 515, 529 (2004). This standard is highly contextual, but generally the question is whether the agency exercised its discretion "unreasonably or without a rational basis." Harvey, 389 Md. at 297; Arnold Rochvarg, Maryland Administrative Law, §4.38 at 128 (2011).

         For guidance, a reviewing court may look to case law applying the similar standard in federal administrative law. See Anacostia Riverkeeper, 447 Md. at 120-21; Office of People's Counsel v. Public Service Commission, 461 Md. 380, 399 (2018).[30] Under this standard, a reviewing court is not to substitute its own judgment for that of the agency and should affirm decisions of "less than ideal clarity" so long as the court can reasonably discern the agency's reasoning. Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285-86 (1974).

         Review of the Agency's Legal Conclusions

         With respect to an agency's legal conclusions, a reviewing court accords the agency less deference than with respect to fact findings or discretionary decisions. Anacostia Riverkeeper, 447 Md. at 122. In particular, a court will not uphold an agency action that is based on an erroneous legal conclusion. Id. However, in construing a law that the agency has been charged to administer, the reviewing court is to give careful consideration to the agency's interpretation.

         In construing a statute, a reviewing court applies the oft-stated approach to statutory construction. That is, the court seeks to ascertain legislative intent - whether that of the General Assembly or of Congress. That endeavor begins with the plain meaning of the text, keeping in mind that the plainest language is controlled by the context in which it appears. Kaczorowski v. Mayor & City Council of Baltimore, 309 Md. 505, 514 (1987). The legislative history of the statute may then be reviewed to understand the purpose of the legislation, resolve ambiguities, and confirm the apparent meaning of the text. Past case law construing a provision is, of course, also helpful. Throughout, the court must be mindful that the purpose is not to discern "purely judicial notions of public policy," but rather legislative intent. BAA, PLC v. Acacia Mutual Life Ins. Co., 400 Md. 136, 157 (2007).

         When a party challenges the agency's interpretation of the statute the agency administers, the court must assess how much weight to accord that interpretation, keeping in mind that it is "always within [the court's] prerogative to determine whether an agency's conclusions of law are correct." Schwartz v. Md. Dep't of Nat. Res., 385 Md. 534, 554 (2005). The weight given an agency's interpretation of a statute it administers depends on several factors. Baltimore Gas & Electric Co. v. Public Service Commission, 305 Md. 145, 161 (1986). More weight is appropriate when the interpretation resulted from a process of "reasoned elaboration" by the agency, when the agency has applied that interpretation consistently over time, or when the interpretation is the product of contested adversarial proceedings or formal rule making. Id. at 161-62.

         b. Effect of the Clean Water Act's Scheme of Cooperative Federalism

         In our consideration of the Department's interpretation and application of the Clean Water Act, we must take into account the extent to which the EPA's administrative interpretation and federal case law set parameters for the Department's actions. The shared implementation of a federal policy or program by federal and state agencies is sometimes referred to as "cooperative federalism." See Anacostia Riverkeeper, 447 Md. at 101. It can affect how a state court reviews that implementation when the state agency's actions are limited by federal policies. In general, a state agency that is delegated the administration of the discharge permitting program under the Act is "bound to follow EPA's interpretation of the [Act]." Natural Resources Defense Council v. New York State Dep't of Envtl. Conservation, 34 N.E.3d 782, 794 n.16 (N.Y. 2015) (declining to entertain a challenge to an EPA regulation interpreting the Act and state agency's compliance with that interpretation).[31]

         Under the Act's cooperative federalism scheme, the EPA has delegated the administration of the Act's discharge permitting program in Maryland to the Department. Nonetheless, the EPA reviews and has the right to object to the Department's draft discharge permits. 40 CFR §123.44 ("EPA review of and objections to State permits"); see also Memorandum of Agreement between EPA and Department (May 18, 1989), available at https://perma.cc/3UNE-4CLN (explaining that the EPA will review all State-prepared permits and may object to them). In addition, the EPA has overseen Maryland's efforts (as well as those of the other Bay States) to achieve the goals of the Bay TMDL - i.e., efforts to develop and carry out the WIPs. See Farm Bureau, 984 F.Supp.2d at 323-24.

         c. Deference Owed to the EPA's Construction of the Clean Water Act

         In assessing the weight to be accorded the EPA's construction of the Act, we look to the deference that would be accorded such interpretations under federal case law. In general, when an agency exercises authority to "make rules carrying the force of law" - i.e., rulemaking, adjudications, or other actions involving similarly extensive administrative procedures - the agency's interpretation warrants deference under Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (1984). Less formal agency action may also merit Chevron deference depending on "the interstitial nature of the legal question, the related expertise of the Agency, the importance of the question to administration of the statute, the complexity of that administration, and the careful consideration the Agency has given the question over a long period of time." Barnhart v. Walton, 535 U.S. 212, 222 (2002).

         Under Chevron, a federal court first determines "whether Congress has directly spoken to the precise question at issue" in the pertinent statute - in this case, the Clean Water Act. 467 U.S. at 842. If the Congressional intent is clear, the court "must give effect to [that] unambiguously expressed intent." Id. at 842-43. But "if the statute is silent or ambiguous with respect to the specific issue," the court must decide "whether the [EPA's] answer is based on a permissible [or reasonable] construction of the statute." Id. at 843-44.

         Even if the particular agency interpretation does not meet the criteria for Chevron deference, a reviewing court may defer to that interpretation based on the persuasiveness of the agency interpretation, considering factors such as "the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control." Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) (Jackson, J.).[32]

         This Court has assessed the validity of State agency actions consistent with a federal agency's regulations or interpretations of a federal statute in light of these principles. See Anacostia Riverkeeper, 447 Md. at 142 & n.61 (citing federal administrative deference case law and finding an EPA policy memorandum "instructive" on interpretation of federal regulation under the Clean Water Act); Sugarloaf Citizens' Ass'n v. Department of the Environment, 344 Md. 271, 313 (1996) (affirming Department action based in part on EPA interpretation of the federal Clean Air Act, which was entitled to deference under Chevron); Koons Ford of Baltimore, Inc. v. Lobach, 398 Md. 38, 54 (2007) (applying Chevron and adopting the FTC's interpretation of a federal statute that the FTC administers); Montgomery Cty. v. Glenmont Hills Associates Privacy World at Glenmont Metro Ctr., 402 Md. 250, 271-72 (2007) (citing Chevron in adopting HUD's interpretation that a federal statute did not preempt local agency action that the Court affirmed).

         2. Reviewability of Permit Terms Derived from TMDLs and WIP

         Incorporation of TMDLs and the Maryland WIP in the Counties' MS4 Permits

         The MS4 permits at issue in this appeal incorporate or reference elements of the Bay TMDL, the Maryland WIP, and certain local TMDLs. That raises the question whether this litigation is the appropriate forum for what amounts to a challenge to those prior administrative actions.

         The Appropriate Forum for Challenging Permit Provisions Derived from a TMDL

         Carroll County argues that provisions of a TMDL that are implemented in a permit must be reviewable in the context of judicial review of that permit - i.e., in an action like this one. The County reasons that, because Maryland statutory law does not provide for judicial review of State-authored TMDLs and because the TMDLs themselves are not self-executing, the only viable mode of judicial review is a challenge to a permit.

         The County is correct that the Maryland Code does not provide for judicial review of a TMDL. The County is also correct that a TMDL is not self-executing. Farm Bureau, 792 F.3d at 291 n.4. However, the absence of a statutory mechanism for review of a TMDL in State court does not mean it is not reviewable in any court. The EPA's approval of a state-submitted TMDL "is an act taken pursuant to the [Clean Water Act] and thus is subject to challenge [in federal court] under the [federal Administrative Procedure Act.]" Anacostia Riverkeeper, Inc. v. Jackson, 798 F.Supp.2d 210, 222 (D.D.C. 2011). For example, the major case challenging the validity of the Bay TMDL was held to be ripe for judicial review in federal court because the "parties present[ed] a purely legal dispute on a well-developed record about the EPA's process of promulgating a TMDL." Farm Bureau, 792 F.3d at 293-94. Similarly, parties challenging other state-prepared, EPA-approved TMDLs have obtained judicial review of the EPA's approval of those TMDLs in federal court. See, e.g., Friends of Earth, Inc. v. EPA, 446 F.3d 140 (D.C. Cir. 2006); Natural Resources Defense Council v. Muszynski, 268 F.3d 91 (2d Cir. 2001); City of Kennett v. EPA, 887 F.3d 424 (8th Cir. 2018).

         To the extent that the Counties are challenging decisions previously made or actions taken in adopting an EPA-approved TMDL, judicial review of those decisions or actions was available in federal court. Unsurprisingly, as this Court has previously indicated, an action for judicial review of a discharge permit in State court is not the forum for raising belated challenges to a TMDL that the challenger could have raised elsewhere. See Anacostia Riverkeeper, 447 Md. at 129 n.46.[33] Thus, in an action by a permittee under EN §1-601 challenging a permit term derived from a TMDL, the permittee may not base that challenge on a decision that was previously made in the development of the TMDL.[34]

         Consistent with the principle recognized in Anacostia Riverkeeper, we conclude that claims concerning a discharge permit that are essentially challenges to a governing TMDL and that could have been raised in an action for judicial review of the EPA's approval of that TMDL cannot be raised in a judicial review action under EN §1-601.[35] Accordingly, as explained further below, we will not entertain some of the Counties' arguments that are essentially challenges to provisions in EPA-approved TMDLs.[36]

         B. Whether the Impervious Surface Restoration Permit Term Unlawfully Exceeds the MEP Standard or is Arbitrary and Capricious

         The Clean Water Act, in describing provisions to be included in an MS4 permit, refers to a standard of "maximum extent practicable" - often denominated by the acronym "MEP." 33 U.S.C. §1342(p)(3)(B)(iii). Whether the MEP standard governs all provisions in an MS4 permit, or only certain provisions, is a matter of debate - a debate that we shall wade into presently. Frederick County's flagship argument in its appeal is that the Department unlawfully disregarded the MEP standard and therefore exceeded its authority when it included the impervious surface restoration requirement in the County's permit. The County further argues that, even if the Act allows the Department to include provisions in the permit without reference to the MEP standard, the impervious surface restoration requirement is impossible to achieve and that the Department acted arbitrarily and capriciously in including it in the permit. Carroll County does not join either of these arguments, although its permit includes an identical impervious surface restoration requirement.

         1. The MEP Standard

         Congress did not define the MEP standard in the Act and the EPA has explicitly declined to define it as well.[37] The phrase "maximum extent practicable" suggests a standard that is, or is close to, the most stringent standard in a hierarchy of possible standards under the Act. However, in the context of the Act's standards for pollution controls, that is not the case.[38] To understand why, it is helpful to review the dichotomy between technology based and water quality based effluent limitations for point sources and then consider how the MEP standard relates to those limitations.

         The Clean Water Act's Hierarchy of Pollution Controls

         In principle, the most that a regulatory agency can require of a point source is to do what is necessary to reduce pollutants to a level such that the waterway satisfies water quality standards. Thus, the most stringent level of control - for any point source - is strict compliance with water quality standards for the pertinent waterway. Given the difficulty of calculating and enforcing such standards, Congress in the Act chose not to "make the perfect the enemy of the good" and authorized the use of technology based effluent limitations for typical, end-of-pipe point sources. 33 U.S.C. §1311(b)(1)(A). Such controls achieve some pollution reduction, although often not enough to achieve water quality standards for the pertinent waterway. As explained above, technology based effluent limitations are designed from the perspective of the discharger while controls based on water quality standards - water quality based effluent limitations - are designed from the perspective of the waterway.

         MEP Standard versus Water Quality Based Standard

         The MEP standard is analogous to a technology based effluent limitation in that its reference point is the MS4 operator rather than the waterway.[39] A water quality based effluent limitation is more stringent than an MEP-level control just as such a limitation is more stringent than a technology based control. Despite this analogy, water quality based effluent limitations operate differently in end-of-pipe point source permits than they do in MS4 permits. With an end-of-pipe point source, a technology based effluent limitation is typically a numeric level of pollution and the point source must install technology to ensure that the amount of pollution emitted from the pipe is below the specified level. A water quality based effluent limitation may simply ratchet down that numeric level, requiring the point source to come up with ways to reduce pollution further.

         With MS4s, however, there generally is no corresponding numeric cap on the amount of pollution discharged by each conveyance within an MS4.[40] Instead, the MS4 operator must implement the various MEP-level management programs required by its permit. In that context, a water quality based control is a program in addition to the MEP-level programs. To say that water quality based controls are "more stringent" than or "beyond" MEP-level controls simply means that the MS4 operator must comply with the water quality based control in addition to the MEP-level controls. For example, Frederick County's permit lists six management programs under the MEP standard. See Frederick County Phase I MS4 Permit MD0068357, Part IV.D.1-6. In addition to those programs, and under a separate section of the permit, the County is to comply with the impervious surface restoration requirement. Id., Part IV.E.2.a.

         The County and the Department appear to agree that the impervious surface restoration requirement in the County's permit is a water quality based control that is in addition to those provisions included under the MEP standard. However, the County asserts that the Department may not include such a term in the permit if it "goes beyond" the MEP standard.

         2. Whether an MS4 Permit Term May "Go Beyond" the MEP Standard

         At first blush, this Court's decision in Anacostia Riverkeeper seems to resolve this issue in the Department's favor.[41] In a background section of that opinion, the Court stated:

MS4s are subject to the MEP standard[.] [They] are not, however, required to [achieve] effluent limitations necessary to meet water quality standards. [But the Act] still requires Maryland to set water quality standards and TMDLs - subject to the EPA's approval. Flowing from this obligation is the requirement that MS4s are subject to effluent limitations that are consistent with [wasteload allocations] of EPA-approved TMDLs.

         447 Md. at 104. In other words, an MS4 permit may include, as needed, effluent limitations consistent with TMDL wasteload allocations, in compliance with the EPA regulation that requires a discharge permit for a point source to contain such effluent limitations. See 40 CFR §122.44(d)(1)(vii)(B). Given that the impervious surface restoration requirement is such an effluent limitation, Anacostia Riverkeeper seems to answer the question raised by Frederick County - i.e., that the 20 percent impervious surface restoration requirement in the permit is valid and authorized by the Clean Water Act. However, in Anacostia Riverkeeper, the Court was addressing a question somewhat distinct from the one posed in this case. In that case, the question was whether the impervious surface restoration requirement satisfied the MEP standard whereas in this case the question is whether it unlawfully exceeds it. The resolution of this question requires statutory construction of the provision in which the MEP standard appears - 33 U.S.C. §1342(p)(3)(B)(iii) - which we shall refer to as clause (B)(iii) for ease of reference.

         Construing Clause (B)(iii) - Statutory Language

         The Clean Water Act specifically addresses municipal and industrial stormwater discharges in 33 U.S.C. §1342(p), which consists of six paragraphs. Paragraph 3 of that subsection sets forth "permit requirements."[42] That paragraph reads as follows:

(3) Permit requirements
(A) Industrial discharges Permits for discharges associated with industrial activity shall meet all applicable provisions of [section 1342] and section 1311 of this title.
(B) Municipal discharge
Permits for discharges from municipal storm sewers-
(i) may be issued on a system- or jurisdiction-wide basis;
(ii) shall include a requirement to effectively prohibit non-stormwater discharges into the storm sewers; and
(iii) shall require controls to reduce the discharge of pollutants to the maximum extent practicable, including management practices, control techniques and system, design and engineering methods, and such other provisions as the [EPA] Administrator or the State determines appropriate for the control of such pollutants.

33 U.S.C. §1342(p)(3). Subparagraph (A) relates to permit requirements for discharges by industrial sources such as factories, landfills, construction sites, and power plants that have operations exposed to rain water or snow melt. Subparagraph A does not directly relate to the requirements in MS4 discharge permits.[43]

         Our focus is on Subparagraph (B) concerning the requirements for MS4 permits. The first two clauses concern the geographic scope of an MS4 permit (clause (B)(i)) and the separation of stormwater discharges from other discharges (clause (B)(ii)), but do not include a reference to the MEP standard.

         Clause (B)(iii) concerns the controls and provisions required to reduce the discharge of pollutants from MS4s. As is evident, the MEP standard appears in this clause. The Department and the County disagree as to the role that the MEP standard plays in clause (B)(iii).

         To construe clause (B)(iii) we begin, of course, with the plain language of the statute. As this case illustrates, however, statutory language is not always "plain" in the sense that it may take on different meanings, depending on how one parses a series of words or clauses. The Department and Frederick County tabulate clause (B)(iii) in slightly different ways to support their contrary interpretations. We apply an editorial pen below to illustrate these different interpretations.

         Frederick County's favored construction of clause (B)(iii) can be illustrated as follows:

Permits for discharges from municipal storm sewers -
(iii) shall require controls to reduce the discharge of pollutants to the maximum extent practicable, including (1) management practices, (2) control techniques and systems, (3) design and engineering methods, and (4) such other provisions as the [EPA] Administrator or the State determines appropriate for the control of such pollutants.

         Under the County's construction, the "controls" subject to the MEP standard are listed in a series following the word "including" - a series of four categories that includes (1) management practices, (2) control techniques and systems, (3) design and engineering methods, and (4) such other provisions as the permitting agency deems appropriate. In that view, there are four categories of pollution controls that might be required by an MS4 permit, including a final catchall category, and all four fall under the MEP umbrella. As indicated above, to support its preferred tabulation and avoid a phrase in the middle of the series of clauses ("system methods") that the County claims is nonsensical, the County asserts that the word "system" is the result of a "typographical error" in the statute that needs to be corrected to "systems."[44]

         In contrast, the Department's construction opts for a different tabulation, but does not require revision of the language of the statute. That interpretation can be illustrated as follows:

Permits for discharges from municipal storm sewers -
(iii) shall require (1) controls to reduce the discharge of pollutants to the maximum extent practicable, including (a) management practices, (b) control techniques and (c) system, design and engineering methods, and (2) such other provisions as the [EPA] Administrator or the State determines appropriate for the control of such pollutants.

         Under this construction of the statute, the three categories of controls enumerated in the initial series - i.e., certain "practices," "techniques," and "methods" - are subject to the MEP standard while "other provisions" that the permitting agency deems appropriate under the final clause are not limited by the MEP standard. The Department's construction does not require revision of the text itself, and groups items that could comfortably fit within the category of "controls" separately from the final clause's vaguer and seemingly broader reference to "appropriate … provisions."

         Confronted with similar competing grammatical arguments concerning the application of the MEP standard in clause (B)(iii), a state appellate court in California concluded that "[a]lthough it is not the clearest way of articulating the concept, the language of [clause (B)(iii)] does communicate the basic principle that the EPA [or an authorized state] retains the discretion to impose 'appropriate' water pollution controls in addition to those that come within the definition of [MEP]." Bldg. Indus. Assn. of San Diego Cty. v. State Water Res. Control Bd., 124 Cal.App.4th 866, 882-83 (2004) ("BIA case").[45] That court upheld requirements in an MS4 permit based on water quality standards in the face of a contention, similar to that of Frederick County in this case, that those provisions unlawfully exceeded the MEP standard.

         Thus, the statement in Anacostia Riverkeeper in a somewhat different context and the assessment of the BIA court in a similar context both favor the Department's construction of clause (B)(iii). We also consider what legislative history exists and the administrative construction of this federal statute by the federal agency charged with administering it - the EPA.

         Legislative History of Clause (B)(iii)

         When Congress was considering the legislation that added the MS4 permit requirements to the Act, legislators often spoke in general terms about achieving water quality standards without elaborating on the MEP standard or addressing whether that standard should apply to every pollutant control in an MS4 permit. Some statements suggested that water quality based standards - i.e., standards other than MEP - would be part of MS4 permits. For example, one senator stated that MS4 permit pollution control "requirements are to contain control technology or other techniques to control these discharges and should conform to water quality requirements." 133 Cong. Rec. S733-02, 1987 WL 928615 (January 14, 1987) (statement of Senator Chafee). On the other hand, another senator paraphrased clause (B)(iii) in language that mirrors the County's interpretation, including substituting the plural "systems" for "system." Id. (statement of Senator Durenberger). Yet another member of Congress both alluded to the goal of controlling stormwater discharges "to protect the quality of the Nation's waters" and in paraphrasing the legislation, used the word "systems." 133 Cong. Rec. H168-03, 1987 WL 928356 (January 8, 1987) (statement of Representative Roe). In the end, what legislative history exists is "not especially illuminating" on the role of the MEP standard.[46]

         EPA's Administrative Construction of Clause (B)(iii)

         The EPA's position for many years was that an MS4 permit, like any discharge permit, must achieve compliance with water quality standards.[47] Indeed, when it adopted regulations for Phase I MS4 permits, the agency described the controls that would be required by such permits as follows: "[MS4] permits are to establish controls to the maximum extent practicable[, ] effectively prohibit non-storm water discharges to the [MS4] and, where necessary, contain applicable water quality-based controls." EPA, National Pollutant Discharge Elimination System Permit Application Regulations for Storm Water Discharges - Final Rule, 55 Fed. Reg. 47990, 47995 (November 16, 1990) ("EPA Preamble to 1990 Phase I MS4 Rule") (emphasis added).

         The EPA partially backed away from this view after the United States Court of Appeals for the Ninth Circuit held that MS4 permits need not include water quality based effluent limitations. See EPA, National Pollutant Discharge Elimination System - Regulations for the Water Pollution Control Program Addressing Storm Water Discharges - Final Rule, 64 Fed. Reg. 68722, 68753 (December 8, 1999) ("EPA Preamble to 1999 Phase II MS4 Rule") (recognizing that a Ninth Circuit decision "disagree[d] with EPA's interpretation of the relationship between" §1311 and §1342(p)). Specifically, in Defenders of Wildlife v. Browner, 191 F.3d 1159, 1164 (9th Cir. 1999), the Ninth Circuit held that §1342(p)(3) "unambiguously demonstrates that Congress did not require [MS4s] to comply strictly with" §1311(b)(1)(C), which requires that discharge permits contain water quality based effluent limitations as needed.[48] On the other hand, the court also stated that the final provision of clause (B)(iii) gives the EPA (and thus a state permitting agency) the discretion to "determine that ensuring strict compliance with state water-quality standards is necessary to control pollutants [or] to require less than strict compliance with state water quality standards." 191 F.3d at 1166.[49] Thus, while the Ninth Circuit did not agree with the EPA's existing construction, it nevertheless recognized that a permitting agency had discretion to include permit terms based on water quality standards.[50]

         In any event, after the Defenders of Wildlife decision, the EPA modified its administrative interpretation of clause (B)(iii). Whereas the agency had taken the view that MS4 permits, like all discharge permits, must contain water quality based effluent limitations as needed, after the Ninth Circuit decision the EPA viewed such limitations as permissible, but not mandatory, in MS4 permits. It cited Defenders of Wildlife as support for the proposition that clause (B)(iii) "specifically preserves the authority for EPA or [authorized states] to include other provisions determined appropriate to reduce pollutants in order to protect water quality." EPA Preamble to 1999 Phase II MS4 Rule, 64 Fed. Reg. at 68788. Accordingly, the Phase II regulation provides that "[a]s appropriate, the permit [for a small MS4] will include [m]ore stringent terms and conditions, including permit requirements ... based on an approved [TMDL] or equivalent analysis, or where the [EPA or state] determines such terms and conditions are needed to protect water quality." 40 CFR §122.34(c)(1). Although the 1999 preamble and rule concern Phase II MS4 permits, the EPA's views on water quality based limitations generally apply to all MS4 permits. For example, the Defenders of Wildlife decision upheld Phase I MS4 permits issued by the EPA that included water quality based limitations.[51]

         The EPA has maintained that position through at least the time period relevant for this litigation. In other words, since 1990, the EPA has held the view that the Act at least authorizes water quality based effluent limitations in MS4 permits.[52] For example, in a letter to the Department concerning Frederick County's permit that appears in the administrative record, the EPA made clear that permitting agencies may include water quality based effluent limitations in MS4 permits: "Where the [permitting] authority determines that MS4 discharges have the reasonable potential to cause or contribute to a water quality standard excursion as [the Department] has done in this case, EPA recommends that the … permitting authority exercise its discretion to include appropriate narrative and/or numeric water quality-based effluent limitations … as necessary to meet water quality standards." EPA Letter to Maryland Department of the Environment re Supplemental Comments on Frederick County Phase I MS4 Permit (September 23, 2014). The EPA also stated that the requirement of consistency between TMDLs and permits applies to MS4s as it does to all point sources: "Pursuant to 40 CFR 122.44(d)(1)(vii)(B), where there is an applicable [TMDL] approved or established by EPA, a [discharge] permit must include effluent limitations that are consistent with the wasteload allocation . . . in the TMDL. This includes MS4 permits." Id.

         Harmonizing MS4 Permit Terms with the TMDL Process

         Clause (B)(iii) is to be read harmoniously with the Act as a whole, including the TMDL process. See King v. St. Vincent's Hospital, 502 U.S. 215, 221 n.10 (1991) (when construing statute, court should read statute as a whole and harmonize its provisions); Condon v. State of Maryland-Univ. of Maryland, 332 Md. 481, 491 (1993) (same). In our view, the EPA's and Department's interpretation of clause (B)(iii) is more consistent with the Act as a whole than the alternative proposed by Frederick County.

         The EPA's regulations require that a water quality based effluent limitation be derived from the applicable water quality standard, without referring to a practicability test. Permitting agencies "shall ensure that [t]he level of water quality to be achieved by [water quality based effluent limitations] on point sources ... is derived from, and complies with, all applicable water quality standards." 40 CFR §122.44(d)(1)(vii)(A). The EPA's rationale is that "[d]eriving water quality-based effluent limits from water quality standards is the only reliable method for developing water quality-based effluent limits that protect aquatic life and human health." EPA, National Pollutant Discharge Elimination System; Surface Water Toxics Control Program - Final Rule, 54 Fed. Reg. 23868, 23879 (June 2, 1989) (preamble to publication of the EPA's rule that, in part, adopted 40 CFR §122.44(d)(1)(vii)). Importantly, this rationale does not distinguish between types of point sources, i.e., whether the discharger is a factory, a wastewater treatment plant, an MS4, or any other kind of point source. The process of implementing TMDLs via discharge permits "results in effluent limits that protect aquatic life and human health because the limits are derived from water quality standards." Id. In other words, when translating TMDL wasteload allocations to effluent limitations in ...


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