SandBar 8:3, October, 2009
Recommended citation: Yarbrough, Mariel, Ballast Water Permits Survive Challenges , 8:3 SandBar 9 (2009).

Ballast Water Permits Survive Challenges

Mariel Yarbrough, 2L, University of Denver Sturm College of Law

Ballast water, which is collected in ballast tanks to increase stability when freight is unloaded from ships, has become a sizable environmental problem for many Great Lakes states. Ballast water discharged in ports as ships load cargo may contain aquatic invasive species (AIS), as well as pollutants such as sediment, rust, and salt. Some estimates claim that ballast water from ocean-going vessels has introduced over 180 different invasive species into the Great Lakes and cost the region billions of dollars.1
      At the federal level, ballast water is regulated by both the Clean Water Act (CWA) and the National Invasive Species Act (NISA). Prior to 2006, the Environmental Protection Agency (EPA) had exempted ballast water discharges from regulation under the CWA. In 2002, however, several organizations filed suit to require the agency to regulate such discharges. In 2006, a federal district court ordered EPA to regulate ballast water discharges under the CWA by September 30, 2008. The ruling was affirmed by the Ninth Circuit, and EPA eventually issued a general permit for the discharge of ballast water by commercial vessels.
      NISA authorizes the Coast Guard to regulate ballast water. Under a previous version of NISA, the Coast Guard promulgated “ballast water management practices” in 1993 that focused on ballast water exchange. The Coast Guard promulgated mandatory national regulations for ballast water management in 2004; however, the regulations exempted classes of ships (“no ballast on board” ships, or NOBOBs) that could potentially introduce invasive species when taking on ballast water once in the Great Lakes.
      In August, the Coast Guard issued a notice of proposed rulemaking to establish ballast water discharge standards. The regulations follow the International Maritime Organization’s (IMO) standards for a set period of time and then become 1,000 times stricter.
      While regulation at the federal level is slowly progressing, states have used their authority under the CWA to develop their own permits. The CWA authorizes states to exceed minimum federal standards to protect their waters.2 Many Great Lakes states, including Minnesota, Michigan, and New York, have used their certification authority to attach conditions to EPA’s general permit. States have also used their authority to issue state permits. Both the shipping industry and environmental groups have challenged these state actions. Courts have generally upheld the permits, giving states permission to continue to provide protection to their waters. Most recently, a Minnesota appeals court upheld the state’s permit despite a challenge from an environmental group alleging that the state did not perform an adequate nondegredation review before issuing the permit. Additionally, New York’s certification has been upheld, as has Michigan’s permitting program.

Minnesota
Pursuant to the CWA, EPA requires states to develop nondegredation policies to maintain water quality to protect existing water uses.3 Minnesota’s nondegredation rule prohibits or controls new or expanded discharges to protected water.4 Minnesota designated Lake Superior as an “outstanding resource value water,” or protected water, in 1984 under the state’s nondegredation rule. Protected waters are “waters of the state with high water quality, wilderness characteristics, unique scientific or ecological significance, exceptional recreational value, or other special qualities which warrant stringent protection from pollution.”5
      To protect Lake Superior from ballast discharges, in September 2008, the Minnesota Pollution Control Agency (MPCA) issued State Disposal System (SDS) Permit MNG300000, a ballast water discharge permit. The permit includes ocean-going vessels and lakers (Great Lakes only vessels), requires compliance with best-management practices, and sets biological treatment standards for ballast water.6 The treatment standards are identical to those mandated by the IMO. MPCA determined that these standards were “the most stringent treatment standards . . . technologically available during the term of the permit.”7
      In October 2008, an environmental advocacy group, Minnesota Center for Environmental Advocacy (MCEA), petitioned the Minnesota appellate court to review the SDS permit.8 MCEA claimed that the agency 1) erroneously concluded that ballast water discharge does not create an “expanded discharge,” 2) conducted an inadequate nondegradation review, and 3) failed to set permit terms that will preserve Lake Superior’s existing water quality.9
      MCEA’s first claim was that MPCA erroneously interpreted “expanded discharge” in the state’s nondegredation policy. When formulating the permit, MPCA determined that most ballast discharges do not cause an increased loading, or expanded discharge, of pollutants because ships were discharging ballast water into Lake Superior in similar volumes prior to the 1984 designation as protected waters.10 MCEA argued that MPCA erroneously focused solely on changes in volume of the ballast water discharge and did not consider changes in “quality, location, or any other manner.” However, the court rejected this argument, noting that “a change in the quality of discharge does not result in an ‘expanded discharge’ under the rule unless ‘an increased loading of one or more pollutants’ results.”11 The court held that MPCA did not err in interpreting the regulatory language regarding “expanded discharge” and that the agency correctly determined that a nondegradation review was required.
      Second, the environmental group claimed that MPCA conducted an inadequate nondegradation review, because the agency did not provide “a baseline analysis of Lake Superior’s existing water quality, an assessment of the risk and manner of water degradation from the individual invasive species believed most likely to invade Lake Superior, and an analysis and determination that the biological-performance standards in the SDS general permit will in fact preserve the existing water quality in light of potential invasive species.”12
      The court found that it was not necessary for the agency to conform to a particular form of nondegredation review. MPCA appropriately focused on the need to maintain Lake Superior’s existing water quality, and deference to the agency’s review is proper because the agency has the special knowledge and technical training necessary to conduct an adequate review. Finally, the court held that the agency’s decision was not arbitrary and capricious because MPCA’s decision did not run counter to the evidence, was not implausible, was not based on factors that were not intended by the legislature, and did not fail to address important aspects of the problem.13
         Third, MCEA claimed that the terms of the SDS general permit would not preserve water quality. MPCA concluded that adopting more stringent standards in the absence of existing technology would not result in preservation of high water quality. MPCA recognized that it will take time to develop and implement better technology and, therefore, required that vessels constructed after January 1, 2012 must be compliant when they begin operating in Minnesota waters. The court concluded that MPCA’s reasoning was sound, and the agency did not err in its adoption of water treatment standards and a timeline for implementation of those standards.
      The court’s overall conclusion was that the process MPCA used to conduct the nondegradation review and to adopt the permit terms was neither based on an error of law nor arbitrary and capricious. The permit survived the challenge.      

Other Challenges
As of January 2007, Michigan required ocean-going vessels that discharge ballast water to use specified technologies to prevent the introduction of invasive species into the Great Lakes.14 Michigan’s law only applies to ocean-going vessels and does not require specific treatment standards.
      In contrast to the permit challenge in Minnesota, several shipping companies, ports, and industry groups sued the state of Michigan, alleging that the statute unconstitutionally interferes with interstate commerce and is preempted by federal law. In this case, a coalition of environmental and conservation groups intervened on behalf of the state.
      In November 2008, the U.S. Court of Appeals for the Sixth Circuit upheld Michigan’s ballast water statute and rejected the shippers’ challenges.15 The court held that Michigan’s statute was not preempted by the federal NISA, and the permit requirement did not conflict with the NISA or the Coast Guard’s regulations promulgated pursuant to it.16 Further, the state’s statute did not violate due process. Michigan had a legitimate interest in protecting its waters from further introduction of AIS from ballast water discharges by ocean-going vessels, and the permit requirement was rationally related to advancing that interest.17
      New York has attached conditions to EPA’s general permit. Ships operating in New York waters are required to begin using technology to treat any ballast water discharged to reduce the potential for invasive species and maintain water quality. In Port of Oswego Authority v. Grannis, the shipping industry argued that New York’s restrictions were both illegal under state law and unconstitutional. Vessel owners and others challenged three of the five conditions included in the CWA § 401 Water Quality Certificate for Commercial Vessel and Large Recreational Vessel General Permit issued by the New York State Department of Environmental Conservation (DEC) in November 2008.18
       The first challenged condition requires that all ships with ballast water on board entering New York waters to travel 50 nautical miles offshore into waters at least 200 meters in depth and exchange the water in their ballast tanks with ocean salt water. Among the exceptions, there is one for freshwater laker vessels.19
      The other challenged conditions set a timeline for existing and new ships, respectively, to install appropriate ballast water treatment systems that meet specifically established standards for organism and microbe content. There are exceptions, and ships may apply for extensions if the required technology is not available.20
      The plaintiffs argued that DEC failed to follow specific procedural requirements, exceeded its legislative authority, impermissibly burdened interstate and foreign commerce, and unlawfully promulgated rules that were arbitrary, capricious, and a clear abuse of agency discretion. Further, permit opponents argued that harm to the economy and to the environment would occur.21
      DEC argued that it had the proper authority under existing state law and that it followed the proper procedure in setting the permit conditions. Additionally, DEC argued that the vessel owners failed to scientifically support the assertion that the permit conditions would do more harm than good to the environment.22
      Further, the Natural Resources Defense Counsel and the National Wildlife Fund intervened in the litigation to oppose the industry’s challenge to the permit and to support the state’s regulations. The court found that “[i]t is undisputed that ballast water on ocean-going vessels . . . is a source of significant potential and actual biological pollution for the State’s water systems . . .”23 The court upheld the state regulations, reasoning that the DEC’s permit application process satisfied the procedural requirements of the state.24 Again, state ballast water regulations survived litigation.

Conclusion
Litigation will likely continue from both commercial interests and environmental advocates, while states and the federal government work to regulate ballast water discharges. While the outcome of litigation with respect to federal permits could be different, so far courts have upheld states’ permits.

Endnotes
1.   Great Lakes Law Blog, http://www.greatlakeslaw.org/blog/aquatic_invasive_species/ (July 28, 2009).
2.   33 U.S.C. § 1370 (2009).
3.   40 C.F.R. § 131.12(a).
4.   Minn. R. 7050.0180.
5.   Minn. R. 7050.0180, subp. 2(A) (emphasis added).
6.   A copy of Minnesota’s permit is available at http://www.pca.state.mn.us/publications/ballast-finalpermit-092408.pdf .
7.   In re Request for Issuance of the SDS General Permit MNG300000 for Ballast Water Discharges from Vessels Transiting Minnesota State Waters of Lake Superior, 769 N.W.2d 312, 316 (Minn. App. 2009).
8.   Minnesota Center for Environmental Advocacy v. Minnesota Pollution Control Agency, Petition for Writ of Certiorari/Minnesota Center for Environmental Advocacy v. Minnesota Pollution Control Agency/ Petition for Writ of Certiorari, No. A08-1828 (Minn. App. Oct. 22, 2008).  (Minn. App. Oct. 22, 2008).
9.  In re Request for Issuance of the SDS General Permit MNG300000, supra note 7, at 315, 318, 320.
10. Id. at 319.
11. Id.
12. Id. at 312, 320-321.
13. Id. at 320-24.
14. Great Lakes Environmental Law Center, http://www.glelc.org/glelc/aquatic-invasive-species.html (last visited Sept. 18, 2009).
15. Fednav, Ltd. v. Chester, 547 F.3d 607 (6th Cir. 2008).
16. Id. at 619.
17. Id. at 625.
18. 881 N.Y.S.2d at 284.
19. Id. at 285.
20. Id.
21. Id. at 285-86.
22. Id. at 286.
23. Id. at 288.
24. Id. at 288-89.