Title: ONRC Action v. Columbia Plywood, Inc.

State: oregon

Issuer: Oregon Supreme Court

Document:

FILED: June 8, 2001
IN THE SUPREME COURT OF THE STATE OF OREGON
ONRC ACTION, 
and KLAMATH FOREST ALLIANCE,
Plaintiffs-Appellants,
	v.
COLUMBIA PLYWOOD, Inc.
Defendant-Appellee.
_________________________________________________________________
ONRC ACTION,
 and KLAMATH FOREST ALLIANCE,
Plaintiffs-Appellants/
Cross-Appellees,
	v.
COLUMBIA PLYWOOD,  Inc.
Defendant-Appellee/
Cross-Appellee.
(USDC CV-97-03087-CO; USCA 98-36233, 99-35019; SC S47437)
	En Banc
	On certified questions from United States Court of Appeals
for the Ninth Circuit order dated April 10, 2000; certification
accepted June 6, 2000.
	Honorable Stephen Reinhardt, David Thompson, and Thomas G.
Nelson, Circuit Judges.
	Argued and submitted January 10, 2001.
	William C. Carpenter, Jr., Eugene, argued the cause and
filed the brief for plaintiffs-appellants. 
	Karen O'Kasey, of Schwabe, Williamson & Wyatt, Portland,
argued the cause and filed the brief for defendant-appellee. 
With her on the brief was Patricia M. Dost.
	Jas. Jeffrey Adams, Assistant Attorney General, Salem, filed
the brief for amici curiae Environmental Quality Commission and
Department of Environmental Quality.  
	LEESON, J.
	First certified question answered.
		LEESON, J.
		This case is before the court on certified questions of
Oregon law from the United States Court of Appeals for the Ninth
Circuit.  ORS 28.200 et seq.; ORAP 12.20.  We accepted the
certified questions.  See Western Helicopter Services v. Rogerson
Aircraft, 311 Or 361, 811 P2d 627 (1991) (discussing factors
court considers in exercising discretion to accept certified
questions).  We summarize the following facts from the Ninth
Circuit's certification order and the excerpt of record filed in
that court.
		The federal Clean Water Act (CWA) prohibits the
discharge of pollutants into navigable waters unless the
discharge is allowed by a National Pollution Discharge
Elimination System (NPDES) permit.  33 USC §§ 1311(a), 1342
(1994).  A state may administer its own NPDES permit program
within its boundaries if the Administrator of the Environmental
Protection Agency certifies it to do so.  Id. § 1342(b).  Oregon
has a certified NPDES program that the Department of
Environmental Quality (DEQ) administers and enforces.  The DEQ
program includes issuing NPDES permits and processing
applications for the renewal of NPDES permits.  ORS 468.035; ORS
468.065.  To renew an NPDES permit, the applicable administrative
rule requires the permit holder to file an application for
renewal with DEQ at least 180 days before the expiration of the
existing permit.  OAR 340-045-0030(1).
		In 1984, Columbia Plywood Corporation (defendant)
received an NPDES permit allowing it to discharge pollutants into
the Klamath River until November 30, 1989.  On August 21, 1989,
fewer than 180 days before that permit would have expired,
defendant applied to DEQ to renew it.  In a letter dated August
24, 1989, DEQ informed defendant that defendant's renewal
application was incomplete, because it was not signed and dated
in two places.  The letter indicated that DEQ was returning the
unsigned and undated parts of the application to defendant and
that, after defendant properly had signed and dated those parts,
DEQ would consider the application "complete for filing."  The
letter also stated that, if DEQ did not take final action on
defendant's renewal application by November 30, 1989, the date on
which defendant's 1984 NPDES permit would expire, then the 1984
permit would "remain in effect until the final action is taken."
		Defendant signed and dated the parts of the application
that DEQ had returned to it, and filed those parts with DEQ on
September 1, 1989.  Since 1989, defendant has continued to
discharge pollutants into the Klamath River under the terms of
its 1984 NPDES permit, because DEQ took no final action on
defendant's renewal application.  As noted, DEQ told defendant in
August 1989 that, after defendant had submitted a complete
renewal application, defendant's 1984 NPDES would remain in
effect until DEQ took final action.
		In 1997, ONRC Action and Klamath Forest Alliance
(plaintiffs) filed suit in federal district court seeking, among
other things, to enjoin defendant from continuing to discharge
pollutants into the Klamath River in violation of the CWA.  See
33 USC § 1365 (1994) (providing authority for citizens to enforce
provisions of CWA through citizen suits).  Plaintiffs contended
that defendant's 1984 NPDES permit had expired on November 30,
1989, that defendant had not timely applied to renew that permit,
and that DEQ had not renewed it.  Plaintiffs argued that DEQ
lacked authority to waive the 180-day filing requirement in OAR
340-045-0030(1) and that its decision to do so and to extend
defendant's 1984 NPDES permit was invalid.  Accordingly,
plaintiffs contended, defendant's 1984 NPDES permit expired on
November 30, 1989, and, since then, defendant has been
discharging pollutants into the Klamath River without a valid
NPDES permit, in violation of the CWA.  An affidavit from a DEQ
water quality manager submitted on defendant's behalf stated that
DEQ considered defendant's application to have been timely filed
and that the terms of defendant's 1984 NPDES permit "continue in
force."
		Defendant moved for summary judgment on the ground that
in 1989 DEQ properly had waived the 180-day filing requirement in
OAR 340-045-0030(1) (1989) and that plaintiffs had not been
prejudiced by that waiver.  A magistrate judge of the United
States District Court for the District of Oregon held that OAR
340-045-0030(1) (1989) is a procedural rule for the benefit of
DEQ and permit holders and that, under federal and Oregon law,
DEQ may waive the provisions of the rule "if such waiver does not
prejudice plaintiffs."  The court then found that plaintiffs had
suffered no prejudice.  Accordingly, it granted defendant's
motion for summary judgment.  After a United States District
Court judge adopted the magistrate judge's findings and
recommendations, plaintiffs appealed to the Ninth Circuit.
		The Ninth Circuit frames the issues of Oregon law on
appeal to that court as a dispute between the parties about
whether, under this court's opinion in Anaconda Company v. Dept.
of Rev., 278 Or 723, 565 P2d 1084 (1977), DEQ had authority to
waive the 180-day filing requirement and whether, under this
court's opinion in Hoffman v. City of Portland, 294 Or 150, 654
P2d 1106 (1982), plaintiffs must show that they have been
prejudiced substantially by that waiver before a court may find
that DEQ's waiver was invalid.  The Ninth Circuit certified the
following questions to this court:
		"1.  Can [DEQ] waive [OAR] 340-045-0030(1), which
requires that an applicant file a renewal application
180 days before its [NPDES] permit expires, by
accepting a renewal application filed less than 180
days before the NPDES permit's expiration date?  If
not, then:
		"2.  Is [DEQ's] extension of the NPDES permit
beyond its original five-year term, pursuant to [OAR]
340-045-0040, invalid because the waiver is invalid, or
must the waiver have prejudiced the plaintiffs before
the waiver can be held invalid?"
		Before turning to the first certified question, we note
the unusual procedural posture in which this case comes to this
court.  Plaintiffs' argue that defendant is violating the CWA by
continuing to discharge pollutants into the Klamath River,
because defendant's 1984 NPDES permit expired on November 30,
1989.  That argument actually is a collateral attack on DEQ's
decision to accept defendant's application for renewal of its
1984 NPDES permit even though defendant had not filed for renewal
at least 180 days before its 1984 permit was set to expire. (1) 
Normally, review of an agency action comes to this court under
the Oregon Administrative Procedures Act, ORS 183.310 et seq.  In
this case, the validity of DEQ's decision to accept defendant's
application to renew its NPDES permit arises in the context of a
federal citizen lawsuit challenging a permit holder's compliance
with the CWA.  That unusual procedural posture does not affect
this court's legal analysis of whether DEQ erred in accepting
defendant's application for renewal of its 1984 NPDES permit. 
See ORS 183.482(8)(a) (court may overrule agency action taken as
result of erroneous interpretation of provision of law); ORS
183.484(5)(a) (same).  We turn to the first certified question.
		DEQ's letter to defendant on August 24, 1989, expressed
the agency's view that it may accept as timely an application for
renewal that is filed fewer than the 180 days specified in OAR
340-045-0030(1) (1989).  Amici DEQ and the Environmental Quality
Commission (EQC), appearing at this court's request, maintain
that one purpose of the 180-day filing requirement in the rule is
to provide for the efficient administration and processing of
NPDES permit applications.  They argue that the requirement was
not intended to "deprive DEQ of authority to accept a NPDES
permit renewal application" submitted fewer than 180 days before
the permit holder's current permit expires.  See ORS
468.035(1)(n) (DEQ may "perform such * * * acts as may be
necessary, proper or desirable to carry out effectively the
duties, powers and responsibilities of [DEQ]"); ORS 468.045(1)(c)
(DEQ to "[a]dminister and enforce the laws of the state
concerning environmental quality"). 
		This court previously has explained the proper inquiry
in challenges involving an agency's interpretation of its own
administrative rule:
		"Where * * * the agency's plausible interpretation
of its own rule cannot be shown either to be
inconsistent with the wording of the rule itself, or
with the rule's context, or with any other source of
law, there is no basis on which this court can assert
that the rule has been interpreted 'erroneously.'  It
follows that * * * this court cannot overrule, under 
ORS 183.482(8)(a) [or ORS 183.484(5)(a)], an agency's
interpretation of its own rule."
Don't Waste Oregon Com. v. Energy Facility Siting, 320 Or 132,
142, 881 P2d 119 (1994).  Accordingly, our task is to determine
whether DEQ's and EQC's interpretation of OAR 340-045-0030 (1989)
is plausible.
	OAR 340-045-0030 (1989) provides:
		"(1) Any person wishing to obtain a new, modified,
or renewal NPDES permit from the Department shall
submit a written application on a form provided by the
Department.  Applications must be submitted at least
180 days before a NPDES permit is needed.  All
application forms must be completed in full and signed
by the applicant or his legally authorized
representative.  The name of the applicant must be the
legal name of the owner of the facilities or his agent
or the lessee responsible for the operation and
maintenance.
		"(2) Applications which are obviously incomplete
or unsigned will not be accepted by the Department for
filing and will be returned to the applicant for
completion.
		"(3) Applications which appear complete will be
accepted by the Department for filing.
		"(4) If the Department later determines that
additional information is needed, it will promptly
request the needed information from the applicant.  The
application will not be considered complete for
processing until the requested information is received. 
The application will be considered to be withdrawn if
the applicant fails to submit the requested information
within 90 days of the request.
		"(5) An application which has been filed with the
U.S. Army Corps of Engineers in accordance with Section
13 of the Federal Refuse Act or an NPDES application
which has been filed with the U.S. Environmental
Protection Agency will be accepted as an application
filed under this section provided the application is
complete and the information on the application is
still current."
(Emphasis added.)
	The emphasized part of OAR 340-045-0030(1) (1989) is
the provision that is at issue in this case.  The word "must"
indicates that the 180-day filing requirement is mandatory.  See
Fleming v. United Services Automobile Assn., 329 Or 449, 456, 988
P2d 378 (1999) (term "must" describes mandatory requirement). 
Plaintiffs argue that, under Anaconda, DEQ lacked authority to
accept defendant's renewal application, because it was not filed
timely.  We first analyze whether Anaconda controls DEQ's
interpretation of OAR 340-045-0030(1) (1989).
	In Anaconda, a tax case, this court construed former
ORS 314.405(2) repealed by Or Laws 1977, ch 870, § 22, which
provided, in part: 
		"If requested by the taxpayer, * * * the taxpayer
shall have an opportunity to confer with the
[Department of Revenue (department)] * * * as to the
proposed assessment at any time prior to the date such
assessment is made."
(Emphasis added.)  See Anaconda, 278 Or at 726 (quoting statute). 
The taxpayer in that case, a corporation, had made such a
request, but the department failed to confer with it before
making the assessment.  This court held that former ORS 314.405
required the department to comply with the statutory requirement
that it provide a taxpayer a conference upon request and that,
absent a showing by the department that its error was harmless,
the department's failure to comply with that statutory obligation
rendered its subsequent assessment invalid.  Id. at 728-30.
	Unlike the statute that was at issue in Anaconda, the
provision of the administrative rule that is at issue here
imposes an obligation on the permit holder, not on the agency, to
comply with a mandatory requirement.  Thus, the reason that the
Anaconda court gave for invalidating the department's assessment 
-- the department's failure to comply with an obligation that the
statute imposed on the department in its dealings with a taxpayer
-- is absent here.  Anaconda does not support plaintiffs'
argument that DEQ lacked authority to accept defendant's permit
renewal application even though the application did not meet the
180-day filing requirement in OAR 340-045-0030(1) (1989). 
Nonetheless, the issue remains whether OAR 340-045-0030 (1989)
prevented DEQ from accepting defendant's renewal application. 
See Don't Waste Oregon, 320 Or at 142 (prescribing analysis of
text and context of rule and other sources of law).  We turn to
that issue.
	As noted, OAR 340-045-0030(1) (1989) contains a
mandatory requirement that a permit holder file an application to
renew an existing NPDES permit at least 180-days before its
existing permit expires.  However, nothing in the text of the
rule requires DEQ to reject a renewal application that is not
filed timely.  Moreover, other provisions of the rule, which
provide context for our analysis of the 180-day filing
requirement in section (1), permit the conclusion that DEQ may
accept an application filed fewer than 180 days before the permit
expires, so long as the application is "complete."
	The sentence immediately following the 180-day filing
requirement in section (1) of OAR 340-045-0040 (1989) provides: 
"All application forms must be completed in full and signed by
the applicant or his legally authorized representative."  Section
(2) provides that "obviously incomplete or unsigned" applications
"will not be accepted by [DEQ] for filing and will be returned to
the applicant for completion."  Section (3) provides that DEQ
will accept "complete" applications, but that section does not
make DEQ's acceptance of an application contingent on the 180-day
filing requirement in subsection (1).  Section (4) authorizes DEQ
to request additional information from an applicant after the
application has been filed and provides that the application will
be deemed "complete" only when DEQ has received the additional
information.  Section (4) also allows the applicant 90 days to
complete the application by providing the requested information. 
Finally, section (5), again without reference to the 180-day
filing requirement in section (1), provides that DEQ will accept
for filing applications filed with the United States Army Corps
of Engineers or Environmental Protection Agency, provided that
the application is "complete."  Reading the 180-day filing
requirement in context with the other provisions of OAR 340-045-0030 (1989) reveals that the completeness of an application, not
when it was filed, is the primary criterion that DEQ considers in
determining whether to accept an application.  The 180-day filing
requirement for applicants to renew an existing NPDES permit thus
appears to be intended to facilitate DEQ's processing of renewal
applications, not to constrain DEQ in the manner that plaintiffs
suggest.  Plaintiffs do not cite any other provision of law that
suggests that DEQ lacks authority to accept defendant's permit
renewal application.  See Don't Waste Oregon, 320 Or at 142
(requiring such showing).
	DEQ's and EQC's interpretation of OAR 340-045-0030(1)
(1989) is plausible; therefore, we cannot say that their
interpretation of the rule is erroneous. Id.   Accordingly, the
answer to the first certified question is that DEQ has the legal
authority to accept and process permit renewal applications that
do not meet the 180-day filing requirement in OAR 340-045-0030(1)(1989).  In light of that answer, we need not answer the
second certified question.
	First certified question answered.

1. 	The magistrate judge, citing Citizens for a Better
Environment-California v. Union Oil Co. of California, 83 F3d
1111 (9th Cir 1996) cert den sub nom 519 US 1101, 117 S Ct 789,
136 L Ed 2d 731 (1997), held that the CWA permits plaintiffs to
attack collaterally DEQ's decision to waive the 180-day filing
requirement.