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New Brunswick, City of v. Milltown, Borough of

Citation: 12 ELR 20136
No. No. 80-4040, 519 F. Supp. 878/16 ERC 1959/(D.N.J., 08/11/1981)

The court holds that § 204(b)(1) of the Federal Water Pollution Control Act authorizes the Environmental Protection Agency (EPA) to withhold construction grant funds from a county sewerage authority to which a municipality without a user charge system indirectly discharges its sewage, but not to order the municipality either to adopt such a user charge system or cease its discharge. The Borough of Milltown, pursuant to contract, sent its sewage to the City of New Brunswick, a client of the Middlesex County Utilities Authority (MCUA), for disposal without charge. EPA withheld part of the construction grant funds for the MCUA on the grounds that Milltown did not have a system of user charges. New Brunswick, seeking to void the contract, sued Milltown and the MCUA, who named EPA a third-party defendant. EPA removed the action to federal district court and counterclaimed, seeking a declaration that it has authority to withhold the grant funds and an order requiring Milltown to adopt a user charge program. The court rules that although Milltown does not discharge directly to the MCUA and is not a paying "subscriber" to those services by virtue of its agreement with New Brunswick, it is nonetheless a "recipient" of waste treatment services from the MCUA and thus subject to the user charge requirement of § 204(b)(1). Moreover, this application of the user charge requirement does not violate the constitutional guarantee against impairment of contracts because it falls within an exception for regulatory legislation reasonably necessary to further a legitimate public purpose. EPA is not estopped from enforcing the requirement, since it has adhered to its position publicly from its initial involvement in the controversy. The court concludes that EPA's sole remedy is to withhold the grant funds pending adoption by Milltown of a user charge program or cessation of its discharge to the MCUA's treatment facility, and defers to the state courts questions of the relative contractual obligations of New Brunswick, Milltown, and the MCUA.

Counsel for Plaintiff
James M. Cahill, Ass't City Attorney
24 Kirkpatrick St., New Brunswick NJ 08901
(201) 249-3660

Counsel for Defendant Borough of Milltown
Robert S. Seguin
Booream & Seguin
2 Booream Ave., Milltown NJ 08850
(201) 828-1500

Counsel for Defendant Middlesex Cty. Utilities Auth.
Francis X. Journick, Richard P. Daingerfield
Wilentz, Goldman & Spitzer
900 Rte. 9, P.O. Box 10, Woodbridge NJ 07095
(201) 636-8000

Counsel for Federal Defendant
Rosanne Mayer
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-5409

Lee Dehihns, Ass't General Counsel
Office of the General Counsel
Environmental Protection Agency, Washington DC 20460
(202) 755-7511