Argument Recap

The Federal Circuit heard oral argument last month in City of Wilmington v. United States, a Clean Water Act case that attracted an amicus brief. In this case, the Federal Circuit is reviewing a determination by the Court of Federal Claims that the City of Wilmington was not entitled to recover “the payment of reasonable service charges” assessed for “the control and abatement of water pollution” and interest pursuant to 33 U.S.C. § 1323. This is our argument recap.

Paul Nyffeler argued for the City of Wilmington. He began by arguing that, without specific statutory authorization, de novo review is generally not to be presumed. Moreover, he asserted, it was erroneous for the Federal Court of Claims to apply de novo review given the absence of any statutory basis to do so. He explained this error is important because, due to the de novo review standard, the Court of Federal Claims did not look to the evidence, and that evidence includes a 2008 Environmental Protection Agency publication that indicates the City of Wilmington was assessing charges for the control and abatement of water pollution in a fair and equitable manner. Nyffeler reiterated that the United States agency in charge of managing stormwater utilities (the EPA) recommended in a 2008 publication that storm utilities across the country follow the City of Wilmington’s lead because its methodology resulted in charges that were fair and equitable.

One judge asked exactly what the 2008 publication endorsed. Nyffeler responded by stating that the publication described exactly the process by which the City of Wilmington was assessing stormwater charges and concluded that this was a fair and equitable way to do so.

Nyffeler turned to the statutory text of 33 U.S.C. § 1323(a). He argued there is no plausible construction of 33 U.S.C. § 1323(a) that can be read to exclude interest. Because of this, he argued, the United States (given that they are property owners in the city of Wilmington) should have been held to the local requirement to pay interest on delinquent stormwater charges.

Nyffeler asserted that, when Congress enacted 33 U.S.C. § 1323, the United States simply became another property owner and were subject to the requirements to pay or contest the charges in some form or another, and the United States did not do either. He argued the burden should be on the United States, moreover, to establish that its failure to exhaust Wilmington’s administrative remedies should be excused. He argued, for example, the United States failed to establish why it could not have appealed before the charges were assessed. He pointed out that, under Wilmington’s ordinance, no retroactive charge corrections can be applied after the charge have been assessed. 

P. Davis Oliver argued for the United States. Oliver noted that, in 2011, Congress declared that the federal government would have to pay stormwater charges just as non-government entities are responsible for paying these charges. Oliver noted, however, that Congress also drafted a specific standard under which an entity shall pay in proportion to its contribution to pollution.

Oliver argued the main issue in this case is that the City of Wilmington failed to make a fair approximation of the government’s contribution to pollution in the relevant area. Oliver maintained the City of Wilmington should have established a relationship between the runoff coefficient they used and the property in question. Oliver argued the City of Wilmington placed the relevant federal properties in a stormwater class that contained too large of a variety of different types of land.

A judge asked what level of granularity the city should be required to establish to prove a fair approximation. Oliver responded by arguing there was no need for mathematical precision but that, generally, the requirement should be that there is something site specific indicating the nature or character of the property in question. Oliver argued the City of Wilmington utterly failed to make any connection between the federal properties in question in terms of their physical characteristics and the charges imposed related to them. Oliver asserted that this was why the trial court correctly found that the charges in question were not reasonable.

The argument turned to the question of interest. Oliver argued that the issue should not be reached in this case because the government was correctly found not liable by the Court of Federal Claims.

As for the 2008 publication, Oliver asserted the Court of Federal Claims was correct in not giving much deference to the EPA and this 2008 publication because the publication was released three years before the relevant standard was enacted in 2011.

In rebuttal, Nyffeler argued the EPA’s 2008 publication should have been viewed as evidence before the court. Specifically, Nyffeler argued, the evidence before the court below established that the EPA said the way the City of Wilmington was assessing stormwater charges was fair and equitable. And, he continued, there was no evidence presented to the contrary. Nyffeler closed by arguing that much of the court’s conclusion is based on speculation rather than evidence.

We will continue monitoring this case and report on developments.