SCOTUS Rules Certain Indirect Discharges Require CWA Permit

Environmental Update

Date: April 30, 2020

Key Notes:

  • Discharges that are the “functional equivalent” of a direct discharge require a CWA permit.
  • Multiple factors are used under the functional equivalent test, but time and distance are the most significant.
  • Lower courts, EPA and states are now charged with determining when permits are required for discharges covered by the Supreme Court’s Maui ruling.

On April 23, the U.S. Supreme Court issued its much-anticipated County of Maui v. Hawaii Wildlife Fund decision, holding that any discharge to navigable waters constituting the “functional equivalent of a direct discharge” requires a permit under the Clean Water Act (CWA). Slip Op. No. 18-260, 590 U.S. __ (2020). This holding partially undercuts some long-standing interpretations of CWA jurisdiction that generally exclude discharges to or from groundwater. Industry groups denounce the court’s ruling as impermissibly broadening the CWA’s scope, while environmental groups view the ruling as a major success.

The case centered around whether subsurface migration of treated sewage from the County of Maui’s underground injection wells into the Pacific Ocean constituted a discharge regulated by the CWA. In 2012, environmental groups filed a CWA citizen suit against the County of Maui, arguing the injections require a permit (specifically, a National Pollutant Discharge Elimination System (NPDES) permit) because without one, they are illegal discharges of pollutants from a “point source” to a “navigable water.” 33 U.S.C. §§ 1311(a) and 1362(12)(A).

The District Court agreed with the environmental groups, finding that a discharge from the wells into groundwater reaching the ocean was “functionally one into navigable water.” 24 F. Supp. 980, 998 (D. Haw. 2014). The Ninth Circuit affirmed the decision, holding that a permit is required when “pollutants are fairly traceable from the point source to a navigable water such that the discharge is the functional equivalent of a discharge into navigable water.” 886 F.3d 737, 749 (9th Cir. 2018). The County of Maui appealed the Ninth Circuit’s decision and the Supreme Court granted certiorari to address “whether the Act ‘requires a permit when pollutants originate from a point source [the injection wells] but are conveyed to navigable waters by a nonpoint source [groundwater][.]’”

The Supreme Court agreed with the Ninth Circuit’s conclusion (i.e., the discharges were regulated under the CWA) but disagreed with its “fairly traceable” standard, explaining that the fairly traceable test was too broad, as it created the risk of requiring permits in “unexpected” circumstances (such as pollutants reaching navigable waters through groundwater 100 years after the point source discharge) and that it could interfere with states’ authority to regulate groundwater and nonpoint source pollution.

Yet the Supreme Court also rejected the County of Maui’s (and the U.S. Solicitor General’s) assertion that the CWA entirely excluded discharges through groundwater. Filing as amicus curiae, the U.S. Solicitor General had supported the county’s position and argued the CWA excludes all releases of pollutants to groundwater. The Solicitor General relied in part on U.S. EPA’s 2019 Interpretive Statement, which says that releases of pollutants to groundwater are excluded from the CWA’s permitting requirements. However, as the court observed, EPA has applied the CWA’s permitting provision to some discharges through groundwater for over 30 years, thus the 2019 Interpretive Statement constitutes somewhat of a shift in EPA’s position.

Instead, the court focused on the phrase “from a point source” and concluded it could not be read to solely regulate discharges “directly” into a navigable water from a point source because doing so would create a loophole in the permitting scheme (i.e., that a different ruling could allow entities to avoid permitting merely by moving their point sources away from a navigable water and allowing them to flow over land, through groundwater, etc., before entering the navigable water). The court explained that the purpose and history of the CWA thus support a reading that requires a permit “when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge.”

Based on the court’s ruling, determining when a discharge is the “functional equivalent” of a direct discharge depends on how similar or different the discharge is to a direct discharge. The court identified “time and distance” as the two most important factors in this evaluation, but also identified the following non-exhaustive list of factors that “may prove relevant” to the analysis:

  • The nature of the material through which the pollutant travels.
  • The extent to which the pollutant is diluted or chemically changed as it travels.
  • The amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source.
  • The manner by or area in which the pollutant enters the navigable waters.
  • The degree to which the pollutant (at that point) has maintained its specific identity.

Writing for the 6-3 majority, Justice Breyer acknowledged that this functional equivalent test does not clearly explain how to deal with “middle instances,” but left it to the District Courts and EPA to provide guidance that will lead to more refined principles in individual cases.

The Maui decision potentially settles related and inconsistent groundwater discharge holdings in the Fourth and Sixth Circuits, which were decided based on different factors and that will now be subject to the functional equivalent test (i.e., lower courts will need to assess the nature of discharges, time/distance, etc.). Upstate Forever v. Kinder Morgan Energy Partners, L.P., 887 F.3d 637 (4th Cir. 2018) (discharges through a “direct hydrological connection” are covered by the CWA); Kentucky Waterways Alliance v. Kentucky Utilities Co.,905 F.3d 925 (6th Cir. 2018) (discharges through groundwater are excluded from the CWA).

While this decision provides a uniform CWA jurisdictional test in groundwater cases, it will likely create great uncertainty amongst regulated entities when determining whether the CWA applies to indirect discharges, particularly as lower courts, EPA and the states attempt to apply the menu of subjective considerations provided by the court. In the meantime, regulated entities will need to evaluate existing remedial projects and future discharges based on the functional equivalent factors currently available, and environmental groups may be emboldened to challenge additional unpermitted discharges.

FOR MORE INFORMATION

For more information, please contact:

Devin A. Barry
216.566.5854
Devin.Barry@ThompsonHine.com

Tasha Miracle
216.566.5622
Tasha.Miracle@ThompsonHine.com

or any other member of our Environmental practice.

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