In 1997, Jamie Hagberg pumped sewage material from the septic tank of a local tavern and subsequently disposed of the sewage material along a 1.6-mile stretch of road near Lavina, Montana. Hagberg was indicted for violating section 1345 of the Clean Water Act[1] for knowingly disposing of domestic sewage material on a public contact site. Section 1345(e) makes it "unlawful for any person to dispose of sludge from a publicly owned treatment works or any other treatment works treating domestic sewage for any use for which regulations have been established pursuant to . . . this section, except in accordance with such regulations."[2] The penalty for violation of section 1345 is punishment of "a fine of not less than $5,000 nor more than $50,000 per day of violation, or . . . imprisonment for not more than 3 years, or . . . both."[3]

The United States first brought the case against Hagberg in the United States District Court for the District of Montana. In his motion for dismissal, Hagberg argued that the tavern's septic tank was not a "publicly owned treatment works or any other treatment works treating domestic sewage" as required for criminal liability under section 1345.[4] The district court agreed with Hagberg, citing three reasons: First, the sewage material that Hagberg dumped did not undergo any sort of treatment described in regulations promulgated pursuant to section 1345.[5] Second, the tavern's septic tank was not a "treatment works" as described in the regulations.[6] Third, the regulations were not meant to include the internal processes of domestic septic tanks.[7] The district court granted the motion to dismiss, and the United States appealed to the Ninth Circuit.

This was a case of first impression for the Ninth Circuit. The Ninth Circuit reviewed the district court's interpretation of section 1345 and its related regulations under a de novo standard of review. The court first reviewed section 1345 in its entirety and determined that Congress established two means for the administration of disposal and use of sewage sludge by the Environmental Protection Agency (EPA).[8] The first is a permit system that requires permits for any disposal of sewage sludge from treatment works[9] if such disposal would result in the addition of a pollutant to any navigable waters.[10] The second is a set of EPA-created regulations providing guidelines for the use and disposal of sludge.[11] The court applied the regulations created pursuant to section 1345(d) to disposal and use of sewage sludge both with and without permits.[12]

The Ninth Circuit decided on the application of the regulations to all use and disposal of sewage material because the regulations contain a direct enforcement provision, which states, that "[n]o person shall use or dispose of sewage sludge through any practice for which requirements are established . . . except in accordance with such requirements."[13] Additionally, the court interpreted sections 1345(f)(1)-(2) to require compliance with the regulations when permits would normally be required and when EPA's Administrator issues permits solely to ensure sewage handlers' compliance with the regulations.[14] Consequently, the court held that EPA intended to apply the regulations for treatment works to all handlers of sewage material.

Hagberg was indicted for the violation of section 1345(e), so the direct enforcement provision and the definitions found in the related regulations were implicated. The Ninth Circuit considered the regulatory definitions of "sewage sludge" and "domestic septage"[15] in its analysis, and the court determined that the material Hagberg transported and released was sewage sludge. The court also considered the regulatory definitions of "treatment" and "treatment works"[16] and determined that these definitions, in context with the section's other regulatory definitions, included a domestic septic tank for purposes of the direct enforcement provision. The court determined that Hagberg's receipt of sewage material from the tavern and his handling of the material placed him within the jurisdiction of the statute and its piecemeal regulatory definitions.

Hagberg argued that the correct definition of "treatment works treating domestic sewage" is given earlier in the regulations for section 1345 and excludes septic tanks and other similar devices.[17] However, the court rejected this argument because the regulation clearly states that the earlier definition is used solely in cases relating to treatment works that are covered by a permit under section 1345(a).[18] Nevertheless, the court recognized the inconsistency in EPA's logic. EPA stated that septic tank owners are excluded from the permit system because EPA wanted technical standards to apply only to septic treatment and processing, not to generation.[19] The direct enforcement provision, on the other hand, imposes technical standards on septic tank owners because septic tanks are considered treatment works under the regulatory definitions for section 1345(e).[20] The court resolved this inconsistency by citing the plain meaning tenet of statutory construction, and noting that where the court finds that a statute's meaning is plain on its face, contrary or inconsistent legislative history does not modify the plain meaning.

Consequently, the court held that disposers of sewage pumped from domestic septic tanks dispose of sewage material from treatment works treating domestic sewage. The Ninth Circuit reinstated the indictment against Hagberg and remanded the case to the district court for trial.