Shortly after my piece “Filtering the Clean Water Act” went up at Hoover’s Defining Ideas, I got an email from Eric Wolinsky, who asked this question:

Lake Champlain has a significant pollution problem caused in large part by runoff from agricultural fields. The current rules require a buffer between crop land and ‘waterways.’ The problem is that there are no required buffers between cropland and ditches that don’t meet the definition of ‘waterways.’ During rains, the runoff enters the ditches, [and then] travels to the ‘waterways’ and on to Lake Champlain. The waterways are buffered, but the ditches are not. The runoff gets to the lake just as if the buffers on the waterways weren’t there.

How do you regulate this situation without expanding the definition of waterways?

He then further elaborated:

The state law is the problem. It allows these practices. It has only been the threat of the EPA putting onerous regulation on point sources that has gotten the state to move on regulating non-point sources.

I realize that from the outside these regulations seem a little crazy, but on the ground in our area the difference between a ditch and a waterway is a distinction without a difference.

Great comments both. The grand inquiry involves two pieces. The first is the interaction between common law actions for nuisances and state permits. The second involves the interaction between state and federal law. This is all pretty technical stuff.  So let us see how to put the system together from scratch.

Step one is to recognize that ordinary damage actions should be allowed to any party that suffers pollution runoff from another — period.  That rule works quite well when there are two private parties whose lands (and waters) are adjacent to each other. The party that suffers the actual harm can recover damages for past losses and require the polluter to take steps to reduce (at the very least) future pollution, and to pay damage to the extent that any residue remains.

The water law situation is a bit more difficult because water can run a great distance, so that the actions have to be allowed to downstream parties who can trace the harm to upstream releases. Where individual lawsuits are too complex to maintain, the state may bring action to stop the nuisance as part of its duties under the public trust doctrine to protect its citizens.

The key point here is that the action for damages and injunctions should lie with the permit system no matter what happens. Unfortunately, the permit system often dictates that any party that complies with the permit cannot be sued for damages that can be laid at his feet. The same happens with any party that settled with the EPA on terms that allow it to continue some pollution. Individual lawsuits are barred by the action.

At this point the system becomes perverse, in that the permit system permits actual pollution that the common law rules would prohibit. The basic rule should always be that compliance with a permit should never excuse the actual pollution that occurs — that would include all the runoff from agricultural production. The sad point is that, in practice, permitting control can reduce environmental protection.

The situation gets more complicated because the federal Clean Water Act contains a complex set of exemptions and exclusions for agricultural activities. Here is the EPA’s list of the exemptions found in Section 404(f): “established (ongoing) farming, ranching, and forestry activities; plowing; seeding; cultivating; harvesting food, fiber, and forest products; minor drainage; upland soil and water conservation practices; maintenance (but not construction) of drainage ditches; construction and maintenance of irrigation ditches; Construction and maintenance of farm or stock ponds; construction and maintenance of farm and forest roads, in accordance with best management practices; maintenance of structures, such as dams, dikes, and levees.”

A sensible case can be made for keeping these activities out of the permit system. But none can be made for insulating the practitioners of the actions from suit when actual or imminent harm takes place. And yet that is just the leap that is made under the Clean Water Act.

Note, of course, that these exemptions are set by Congress, and that there is thus nothing that the EPA can do about it directly. Wolinksy’s observation that the federal government is putting extra pressure on point sources to get the state to regulate non-point sources may well be true, but it indicates how badly the overall system is put together. It is wholly improper to overregulate point sources in order to achieve that indirect end. Never make one error to stop another. After all, that overregulation produces real economic losses given the low rate of return from those investments. The second-best approach always ends in failure. It is far better that the state just follow the common law rule that treats all pollution the same regardless of the activity that generates it.

The situation gets more complicated once the pollution involves interstate activities. In Milwaukee v. Illinois II, Justice Rehnquist held that the comprehensive provision under the 1972 Clean Air Act made it impossible for a state to sue another state (or a local government within that state) under federal common law (i.e., judge-made law enforced by federal courts). The theory was that Congress had taken over the whole area, so that the private rights of action were removed as the permitting controls took hold.

That case did not decide the question of whether state common law action could be brought between the citizens of two states. But in a 1987 case that ironically involves Lake Champlain, International Paper Company v. Ouelette, the Supreme Court took the position that the law of the polluting state (New York, in this instance) controlled a damage action brought by Vermont on behalf of its citizens. The great difficulty with this decision is that New York has every incentive to stack the deck to make it harder for Vermont to sue for pollution. The older federal law, crafted by neutral judges, will do a lot better.

So the upshot is that we have today a Clean Water Act that regulates all sorts of land-based activities that have little or no chance of causing harm. But it creates an odd set of exemptions for direct polluting activity, which should be subject to suit whether it runs through ditches or waterways, even if there were no federal or state clean water acts. People underestimate the power of state common law nuisance actions to clean up messes, and thus gravitate to a permitting system, which is porous when run at either the federal or state level.

The basic point here is not that all permits are illicit. The 1899 Rivers and Harbors Act, still in place, introduced quite sensible provisions that make it a crime a to discharge refuse of any kind into a navigable body of water or one of its tributaries without a permit, and did the same thing for efforts to excavate or otherwise alter the course of a river, again without a permit. These are all high-risk activities where permits make sense. Permits make no sense for most land-based operations of the sort reached by the extravagant definition that the EPA and the Army Corps put on “the (navigable) waters of the United States.”  They probably also don’t make sense for small waterways and ditches, so long as the common law option for private nuisance suits remain. Trust the government to get everything upside down on these issues.