Nw. Pulp & Paper Ass'n. v. Dep't of Ecology

• Court: Washington Supreme Court
• Decided: December 8, 2022
• Docket: 100,573-3
• Status: Published

Opinion

NOTICE: SLIP OPINION (not the court’s final written decision)

The opinion that begins on the next page is a slip opinion. Slip opinions are the written opinions that are originally filed by the court. A slip opinion is not necessarily the court’s final written decision. Slip opinions can be changed by subsequent court orders. For example, a court may issue an order making substantive changes to a slip opinion or publishing for precedential purposes a previously “unpublished” opinion. Additionally, nonsubstantive edits (for style, grammar, citation, format, punctuation, etc.) are made before the opinions that have precedential value are published in the official reports of court decisions: the Washington Reports 2d and the Washington Appellate Reports. An opinion in the official reports replaces the slip opinion as the official opinion of the court. The slip opinion that begins on the next page is for a published opinion, and it has since been revised for publication in the printed official reports. The official text of the court’s opinion is found in the advance sheets and the bound volumes of the official reports. Also, an electronic version (intended to mirror the language found in the official reports) of the revised opinion can be found, free of charge, at this website: https://www.lexisnexis.com/clients/wareports. For more information about precedential (published) opinions, nonprecedential (unpublished) opinions, slip opinions, and the official reports, see https://www.courts.wa.gov/opinions and the information that is linked there. For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. FILE THIS OPINION WAS FILED FOR RECORD AT 8 A.M. ON DECEMBER 8, 2022 IN CLERK’S OFFICE SUPREME COURT, STATE OF WASHINGTON DECEMBER 8, 2022 ERIN L. LENNON SUPREME COURT CLERK

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

NORTHWEST PULP & PAPER ) ASSOCIATION; THE ASSOCIATION OF ) WASHINGTON BUSINESS; AND ) No. 100573-3 WASHINGTON FARM BUREAU, ) ) En Banc Petitioners, ) ) Filed: December 8, 2022 v. ) ) STATE OF WASHINGTON, ) DEPARTMENT OF ECOLOGY, ) ) Respondent. ) )

OWENS, J.—The Department of Ecology (Department) issues a Water Quality

Program Permit Writer’s Manual (Manual) to provide technical guidance to its staff

tasked with drafting permits for entities that discharge pollutants into Washington’s

waterways. In 2018, the Department revised the Manual and added a new section,

chapter 6, section 4.5 (Section 4.5), which addressed methods permit writers can use to

identify and measure polychlorinated biphenyls (PCBs) discharged into our waters. For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Northwest Pulp & Paper Association, et al. v. Department of Ecology No. 100573-3

This specific revision was challenged on the grounds it constituted rule making outside

of the Administrative Procedure Act (APA), chapter 34.05 RCW.

Like the courts below, we hold that Section 4.5 is not a rule for purposes of the

APA because it merely guides permit writers, who have discretion to choose test

methods on a case-by-case basis, and does not require the uniform application of a

standard to an entire class of entities who discharge PCBs. Accordingly, we affirm the

courts below and remand for any further proceedings necessary to carry out this opinion.

FACTS

In order to restore and maintain the chemical, physical, and biological integrity

of the nation’s waters, the Clean Water Act prohibits the discharge of any pollutant

without a permit issued in compliance with the National Pollution Discharge

Elimination System (NPDES). 33 U.S.C. §§ 1311(a), 1342(a)(1). Among the

pollutants subject to regulation are PCBs. 40 C.F.R. § 129.4(f). Although PCBs were

banned by the United States Environmental Protection Agency (EPA) in 1976, they

remain a major environmental concern due to their toxicity, ubiquity, persistency, and

tendency to bioaccumulate. Administrative Record (AR) at 0922.0004. Any entity

that discharges PCBs into the waterways must have a discharge permit and comply

with discharge limits as well as monitoring and reporting requirements. 40 C.F.R.

§ 122.21(a).

2 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Northwest Pulp & Paper Association, et al. v. Department of Ecology No. 100573-3

State Water Quality Authority and Standards

In Washington, the Department is responsible for establishing water standards

and for administering the NPDES permit program. 33 U.S.C. § 1342(b); RCW

90.48.260(1). If a discharger violates or has the “reasonable potential” to violate

water quality standards by discharging a particular pollutant, the discharger’s NPDES

permit must contain effluent limitations for that pollutant. 40 C.F.R.

§ 122.44(d)(1)(iii). An effluent limit is a restriction on the quantity, rate, and

concentration of a pollutant discharged into the waters of the state. AR at 0164.0021.

Currently, EPA-approved Method 608.3 has a detection limit for PCBs of .065 μg/L

(micrograms per liter). 40 C.F.R. § 136.3 tbl.IC. However, Washington’s water

quality standards set a much lower numeric effluent limit for concentrations of PCBs

at 0.00017 μg/L. WAC 173-201A-240.

PCB Test Methods

PCBs are groups of 209 individual compounds known as congeners. AR at

0922.0004. Specific mixtures of congeners were originally produced under the trade

name Aroclor. Id. Both Method 608.3 and Method 8082A measure the total amount

of PCBs present but have only limited ability to identify individual PCB congeners.

Id. at 0922.0005. Method 1668C can measure concentrations of individual congeners

and may be helpful when identifying the source of PCBs on the site. AR at

0164.0263-64. However, the individual congener method is more expensive and

3 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Northwest Pulp & Paper Association, et al. v. Department of Ecology No. 100573-3

difficult to perform. AR at 0922.0005. The federal regulations state that Method

1668C “may be useful for determination of PCBs as individual chlorinated biphenyl

congeners,” but as of the latest revision of the federal regulations, the method had not

been approved for use. 40 C.F.R. § 136.3, app. A, Method 608.3 (list of current EPA-

approved methods for testing PCB).

The Manual

At issue here is whether the Department inappropriately promulgated a rule

when it revised the Manual to include additional test methods 1668C and 8082A. If

the new section is a rule, the Department would have been required to follow APA

rule making procedures.

The Manual provides “technical guidance and policy” for permit writers who

develop wastewater discharge permits in Washington State. AR at 0164.0031.

Section 4.5 states that Methods 8082A and 1668C “may be used for permitting

purposes to evaluate sources, but not for numeric effluent limit compliance.” AR at

0164.0250; see also AR at 0164.0261. Thus, permit writers must use Method 608.3 to

determine compliance, but permit writers may use data collected by Methods 1668C

and 8082A when evaluating a discharger’s reasonable potential to violate water

quality standards. AR at 0164.0250, .0261.

Section 4.5 also notes that PCBs are subject to Washington’s regulatory

requirement that all known, available, and reasonable methods of treatment (AKART)

4 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Northwest Pulp & Paper Association, et al. v. Department of Ecology No. 100573-3

are used to control pollutants. WAC 173-220-130; RCW 90.48.520; AR at

0164.0263. AKART includes best management practices, some of which may require

the use of Methods 1668C and/or Method 8082A. See AR at 0164.0263-64.

Procedural Background

Northwest Pulp and Paper Association, the Association of Washington

Business, and Washington Farm Bureau (collectively NWPP) petitioned for judicial

review and declaratory judgment under the APA, asking the superior court to

invalidate Section 4.5. They alleged that the Department promulgated a rule without

complying with APA rule making requirements and exceeded its authority, and that

the section is arbitrary and capricious. The superior court dismissed the petition and

denied declaratory relief, concluding that Section 4.5 is not a rule under the APA.

The Court of Appeals affirmed, holding that NWPP failed to show that Section

4.5 was a “rule” under the APA definition because it is not a directive of general

applicability. Nw. Pulp & Paper Ass’n v. Dep’t of Ecology, 20 Wn. App. 2d 533, 535,

500 P.3d 231 (2021). The Court of Appeals did not address whether Section 4.5 fell

into one of the enumerated categories requiring rule making in RCW 34.05.010(16).

NWPP petitioned this court for review, which was granted. Nw. Pulp & Paper

Ass’n v. Dep’t of Ecology, 199 Wn.2d 1010 (2022).

5 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Northwest Pulp & Paper Association, et al. v. Department of Ecology No. 100573-3

ISSUES

1. Does Section 4.5 of the Manual constitute a “rule” under the APA

definition?

2. Does Section 4.5 fall into one of the five enumerated categories that

require rule making procedures under RCW 34.05.010(16)?

STANDARD OF REVIEW

Whether Section 4.5 is a rule as defined by the APA is a question of statutory

interpretation the court reviews de novo. Dep’t of Ecology v. Campbell & Gwinn, LLC,

146 Wn.2d 1, 9, 43 P.3d 4 (2002) (citing State v. Breazeale, 144 Wn.2d 829, 837, 31

P.3d 1155 (2001)). If Section 4.5 is a rule, NWPP bears the burden of proving the

rule is invalid. RCW 34.05.570(1)(a). The court may declare a new rule invalid “only

if it finds that: The rule violates constitutional provisions; the rule exceeds the

statutory authority of the agency; the rule was adopted without compliance with

statutory rule-making procedures; or the rule is arbitrary and capricious.” RCW

34.05.570(2)(c); see also Wash. State Hosp. Ass’n v. Dep’t of Health, 183 Wn.2d 590,

595, 353 P.3d 1285 (2015).

ANALYSIS

Rules are invalid unless adopted in compliance with the APA. Hillis v. Dep't

of Ecology, 131 Wn.2d 373, 398, 932 P.2d 139 (1997). Rule making procedures

under the APA involve providing the public with notice of the proposed rule and an

6 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Northwest Pulp & Paper Association, et al. v. Department of Ecology No. 100573-3

opportunity to comment on the proposal. Id. at 399; RCW 34.05.320, .325. These

procedures allow members of the public to meaningfully participate in the

development of agency policies that affect them. Hillis, 131 Wn.2d at 399; RCW

34.05.001.

We first consider whether Section 4.5 meets the APA’s definition of a rule.

The APA definition of a rule contains two elements. RCW 34.05.010(16).

First, a “rule” must be “any agency order, directive, or regulation of general

applicability”; second, the rule must fall into one of five enumerated categories. Id.;

Failor’s Pharmacy v. Dep’t of Soc. & Health Servs., 125 Wn.2d 488, 494, 886 P.2d

147 (1994). As a threshold matter, then, Section 4.5 must constitute an agency

directive of general applicability to be a rule. It does not.

Section 4.5 Is Not a Directive of General Applicability Because the Methods Described in the Section Do Not Apply Uniformly to All Members of a Class An action is of general applicability if it applies uniformly to all members of a

class. Failor’s, 125 Wn.2d at 494; see also Simpson Tacoma Kraft Co. v. Dep’t of

Ecology, 119 Wn.2d 640, 648, 835 P.2d 1030 (1992). Thus, a plaintiff must challenge

a policy that applies to all participants in a program, and not how policy is being

applied under a single contract or assessment of individual benefits. Failor’s, 125

Wn.2d at 494; Simpson, 119 Wn.2d at 648.

The Court of Appeals, summarizing the holdings in Failor’s, Simpson, and

Sudar v. Fish & Wildlife Comm’n, 187 Wn. App. 22, 33, 347 P.3d 1090 (2015),

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correctly observed that not every agency action carries the force of a rule. Nw. Pulp

& Paper, 20 Wn. App. 2d at 546. In holding that Section 4.5 is not a rule, the court

reasoned that “[w]here the agency action provides guidance for agency staff that (1)

allows staff to exercise discretion, (2) provides for case-by-case analysis of variables

rather than a uniform application of a standard, and (3) is not binding on the regulated

community, the action does not constitute a directive of general applicability.” Id.

NWPP argues that the Court of Appeals’ observation set out a new standard for

general applicability. Pet. for Review at 3, 18. We disagree. The Court of Appeals

simply distilled the distinguishing characteristics of a rule of general applicability.

In Failor’s, we considered a similar challenge brought by Medicaid

prescription service providers to changes made by the Department of Health and

Human Services to the Medicaid reimbursement schedule. 125 Wn.2d at 491-92. We

rejected the Department’s argument that the schedules were not generally applicable

because each provider group had a different payment amount and could accept or

reject the amount in their individual contract. Id. at 495. We had previously rejected

a similar argument in Simpson, where the Department argued that its numeric standard

for concentration of dioxin in the state’s waters was not a rule because it applied to

permittees individually and not as members of a class. 119 Wn.2d at 647-48.

But Failor’s and Simpson do not apply here. In those cases, the departments

promulgated generally applicable rules that applied without discretion. Here, the

8 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Northwest Pulp & Paper Association, et al. v. Department of Ecology No. 100573-3

Manual does not impose a uniform numeric standard or schedule that applies to all

permittees who discharge PCBs. Instead, it vests considerable discretion in the permit

writers.

First, Section 4.5 does not impose a uniform numeric standard or schedule

because permit writers have the discretion to choose the type of monitoring necessary

based on the circumstances of the facility. Before requiring any monitoring for PCBs,

permit writers “should evaluate their facility and the potential for exceeding the water

quality standard.” AR at 0164.0260. In fact, PCB monitoring may not be necessary

at all. Id. Permit writers are cautioned to “only include monitoring requirements

when necessary for the facility and its specific discharge situation” and to “consider

the value and purpose of requiring PCB monitoring.” AR at 0164.0260-61. This

discretion to choose a method on a case-by-case basis was totally absent in Failor’s.

There, even though the outcomes differed, the same reimbursement schedule was

applied to all members of the community, which made the standards generally

applicable. Here, different monitoring requirements apply depending on the

circumstances of the facility, so no standard for testing is applied uniformly to all

dischargers.

Second, a standard is not applied uniformly where permit writers have the

option of exploring an alternative process altogether. Although permit writers are

required to use the procedures outlined in the Manual, writers are also allowed to

9 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Northwest Pulp & Paper Association, et al. v. Department of Ecology No. 100573-3

discuss alternative processes with their supervisors. AR at 0164.0004, 0164.00033.

NWPP argues that in spite of the Manual’s language, recent permits have required the

use of Method 8082A or 1668C for monitoring discharge. Suppl. Br. of Pet’r at 19.

However, these requirements align with the EPA’s recommendation to use best

management practices and there is nothing in the record to suggest that permit writers

have not been allowed to explore alternative processes.

Relying on Hillis, NWPP argues that the ability to exercise discretion does not

prevent an agency action from being an APA rule. See Suppl. Br. of Pet’r at 20-21.

Hillis considered the Department water permit priorities and prerequisites in the wake

of budget cuts. Id. at 397-98. We were not asked to decide whether these priorities

and prerequisites were of general applicability, as the Department conceded they

were. Id. In contrast, here, the Department has discretion to grant permits, and the

facts differ significantly. In this case, individual permit writers are given discretion to

choose among test methods depending on the circumstances of the permittee.

NWPP also argues that an agency action does not have to be legally

enforceable to be an APA rule. See Suppl. Br. of Pet’r at 20. However, we have stated

that “rules or declaratory orders adopted by an agency are enforceable, and a violation

‘subjects a person to a penalty or administrative sanction.’” Wash. Educ. Ass’n v.

Pub. Disclosure Comm’n, 150 Wn.2d 612, 619, 80 P.3d 608 (2003) (quoting RCW

34.05.010(16)(a)); see also Simpson, 119 Wn.2d at 647 (“The APA defines a ‘rule’ as

10 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Northwest Pulp & Paper Association, et al. v. Department of Ecology No. 100573-3

‘any agency order, directive, or regulation of general applicability . . . the violation of

which subjects a person to a penalty or administrative sanction.’” (alteration in

original) (quoting former RCW 34.05.010(15) (1988))). Conversely, a document that

aids and assists in compliance with the law or interprets a statutory phrase without

adding any requirements does not constitute a rule. See id.; Budget Rent A Car Corp.

v. Dep’t of Licensing, 144 Wn.2d 889, 897-98, 31 P.3d 1174 (2001). Following this

reasoning, the Court of Appeals held that a policy document was not a rule because it

did not impose an independent regulatory mechanism that operates with the force of

law. Sudar, 187 Wn. App. at 33-34.

Here, the Manual specifically states that it is a “technical guidance and policy

manual.” AR at 0164.0031. The Manual “describes law and regulation pertaining to

permitting”; it is “not regulation and should not be cited as a regulatory authority for

any permit condition.” AR at 0164.0033. Regulatory authority comes from the

federal clean water act and the state’s water quality standards set in WAC 173-201A-

010 and RCW 90.48.520, but not the Manual. The Department did not create any

additional requirements to the regulations that bind all dischargers of PCBs when it

included Methods 8082A and 1668C as additional test methods.

In sum, the Manual does not impose a uniform standard on all dischargers

because permit writers have the discretion to seek alternative processes, and any

decisions about specific PCB testing requirements are necessarily made on a case-by-

11 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Northwest Pulp & Paper Association, et al. v. Department of Ecology No. 100573-3

case basis depending on the circumstances of each individual facility. Section 4.5 of

the Manual provides guidance for permit writers and does not have any independent

regulatory effect. Thus Section 4.5 does not constitute a directive of general

applicability and is not a rule as defined by the APA.

To be properly characterized as a rule for purposes of the APA, it must both be

of general applicability and fit within at least one of the five categories enumerated in

RCW 34.05.010(16). Because NWPP has not shown that Section 4.5 satisfies the first

element, we need not address whether Section 4.5 falls within one of the enumerated

categories in satisfaction of the second element.

CONCLUSION

We affirm the courts below and hold that the Department of Ecology did not

invalidly promulgate a rule when it added Section 4.5 to its Water Quality Program

Permit Writer’s Manual. Accordingly, we affirm the courts below and remand for any

further proceedings that may be necessary.

12 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. Northwest Pulp & Paper Association, et al. v. Department of Ecology No. 100573-3

WE CONCUR: