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By Timothy D. Backstrom, James V. Aidala, and Kelly N. Garson

On April 23, 2020, the Supreme Court ruled that pollution traveling indirectly to rivers and streams through groundwater can be covered by the Clean Water Act’s (CWA) permitting requirements.  The case, County of Maui, Hawaii v. Hawaii Wildlife Fund, et al, 590 U.S. (2020), concerned whether pollutants discharged from a point source into groundwater, a non-point source, and then conveyed into navigable waters fall within permitting requirements of the CWA.  In a 6-3 Opinion delivered by Justice Breyer, the Court held that the CWA “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.” Slip op. at 15.

Under the CWA, a point source is a discernable conveyance such as a pipeline and other conduit, including wells (the Court notes that wells ordinarily result in discharge of pollutants through groundwater). Slip op. at 13.  The case at issue concerned the County of Maui’s (Maui) operation of a wastewater reclamation facility that collected and partially treated sewage before pumping the treated water into four underground injection wells.  From the wells, the treated water traveled half a mile through groundwater into the Pacific Ocean, a navigable water.  Maui had not obtained a permit for the discharge, and in 2012, several environmental groups brought a citizens’ CWA lawsuit against the county.

The legal question of whether the CWA’s permitting program covers pollution that travels from a point source, like a factory discharge pipe or a containment pond, through groundwater before reaching a downstream water has major implications for industries ranging from agriculture to oil and gas.  The Court’s “functional equivalent” standard for the reach of federal regulation is an interpretation that is narrower than the one sought by environmentalists and endorsed by the Ninth U.S. Circuit Court of Appeals, but the Court declined to defer to the U.S. Environmental Protection Agency’s (EPA) 2019 Interpretative Statement.  84 Fed. Reg. 16810, 16824 (April 2019).

EPA’s Interpretive Statement supported the argument of Maui and the U.S. Solicitor General that if any non-point source lies between the point source and the navigable water, a permit is not required for the release.  Groundwater and non-point pollution that is generated, for instance, by rainwater runoff is not covered by the CWA and is regulated by the states.  The Court rejected this interpretation, posing the question: “If that is the correct interpretation of the statute, then why could not the pipe’s owner, seeking to avoid the permit requirement, simply move the pipe back, perhaps only a few yards, so that the pollution must travel through at least some groundwater before reaching the sea?”  Slip op. at 10.  The Court held that “to follow EPA’s reading would open a loophole allowing easy evasion of the statutory provision’s basic purposes.  Such an interpretation is neither persuasive nor reasonable.” Slip op. at 12.

The Court did not adopt the “fairly traceable” standard supported by the environmental groups and the Ninth Circuit either, as its scope would be too broad, and would interfere too seriously with states’ traditional and intended regulatory authority over groundwater and non-source pollution. Slip op. at 7-8.

The “functional equivalent of a direct discharge” standard will require a permit for discharge from any point source directly into navigable waters, and from point sources when the discharge “reaches the same result through roughly similar means.”  The Court identified seven factors that may be relevant in determining whether the discharge comes “from” a point source:

(1) transit time, (2) distance traveled, (3) the nature of the material through which the pollutant travels, (4) the extent to which the pollutant is diluted or chemically changed as it travels, (5) the amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source, (6) the manner by or area in which the pollutant enters the navigable waters, (7) the degree to which the pollution (at that point) has maintained its specific identity. Slip op. at 16.

The Court notes that time and distance will be important factors in many (though potentially not all) cases.  For example, a distance of a few feet is concretely within the scope of the permitting requirement; a distance of 50 miles that may take a year for the water and perhaps mixing with other materials before reaching the navigable water is indeterminate.

The Court stated that the “functional equivalent” standard will essentially maintain EPA’s longstanding interpretation of the 1972 water law’s requirements prior to the 2019 Interpretive Statement that sought to narrow its reach.  The Court further acknowledges that the new standard may expand the scope of the CWA as it applies to wells and septic systems, but does not expect an “unmanageable expansion” of the permitting program, and expects that EPA and the states will mitigate harms and initiate a best practices permitting policy, and that judges will exercise discretion mindful of the complexities of indirect discharges.  Slip op. at 18.

Commentary

The decision of the Supreme Court to construe National Pollutant Discharge Elimination System permitting requirements to extend to indirect discharges that originate at a point source but travel through groundwater before reaching navigable waters was not particularly surprising.  Reviewing courts have generally been mindful that completely excluding all discharges to groundwater from permitting might encourage dischargers to use discharges to groundwater to evade otherwise applicable control requirements.  Nonetheless, it was somewhat surprising when the Court created a new “functional equivalence” standard that was not specifically advocated by the litigants.

Although the Court clearly intended to adopt a construction that was less expansive than the “fairly traceable” standard adopted by the Ninth Circuit, EPA and the states will have to determine how the seven potentially relevant factors identified by the Court will be utilized in determining when a permit will be required for indirect discharges.  EPA and the states will also have discretion to determine whether there are other “potentially relevant factors applicable to factually different cases” as anticipated by the Court.  Slip op. at 16.  This case involved deliberate discharges of municipal wastewater to underground injection wells, but future policy disputes and litigation are likely to focus on indirect discharges that are more inadvertent in character.  Activities of particular interest include indirect discharges from agriculture, and indirect discharges from impoundments that have been used to collect coal ash, mining tailings, and other types of industrial waste.

In the absence of Congressional intervention to codify clearly what is required, the courts can only do so much.  The Supreme Court has concluded that Congress could not have intended to create a loophole in the water permitting scheme so large as to encourage deliberate evasion, but it falls now to EPA and the states to determine what sort of indirect discharges are “functionally equivalent” to a direct discharge.  Although the Court has afforded considerable latitude to permitting agencies in deciding how to effectuate the new standard, the decision will most likely lead to a new round of contentious litigation before a policy for permitting of indirect discharges can ultimately be adopted.


 

By James V. Aidala and Susan M. Kirsch

On April 23, 2019, the U.S. Environmental Protection Agency (EPA) announced it was making available its Interpretive Statement addressing whether the Clean Water Act’s (CWA) National Pollutant Discharge Elimination System (NPDES) permit program applies to releases of a pollutant from a point source to groundwater (Interpretive Statement) for comment.  84 Fed. Reg. 16810.  EPA is issuing the Interpretative statement to “provide clarity on [EPA’s] interpretation of the [CWA] given the mixed record of prior [EPA] statements and a split in the federal circuit courts regarding this issue.” EPA’s Interpretive Statement states that it “sets forth [its] interpretation of the [CWA NPDES] permit program’s applicability to releases of pollutants from a point source to groundwater that subsequently migrate or are conveyed by groundwater to jurisdictional surface waters” and “EPA concludes that the [CWA] is best read as excluding all releases of pollutants from a point source to groundwater from NPDES program coverage and liability under Section 301 of the CWA, regardless of a hydrologic connection between the groundwater and a jurisdictional surface water.”  EPA also released a fact sheet on its Interpretive Statement, available online.

The April 23 Federal Register notice states that the Interpretative Statement reflects EPA’s consideration of the public comments received in response to its February 20, 2018, Federal Register notice (83 Fed. Reg. 7126) which requested comment on EPA’s previous statements regarding whether pollutant discharges from point sources that reach jurisdictional surface waters via groundwater or other subsurface flow that has a direct hydrologic connection to the jurisdictional surface water may be subject to CWA regulation.  EPA received over 50,000 comments from a wide range of stakeholders, many of which affirmed that additional clarity from EPA was necessary.  EPA reached its conclusion based on the comments received and on “a holistic analysis of the [CWA], its text, structure, and legislative history.”  EPA also references numerous policy considerations that support excluding groundwater discharges from NPDES permitting, including existing state and federal authorities and statutes that play a role in regulating groundwater quality (e.g., Safe Drinking Water Act (SDWA) Underground Injection Control (UIC) program).

EPA is soliciting public comments on the Interpretive Statement, specifically regarding what may be needed to provide further clarity and regulatory certainty on this issue.  Comments are due by June 7, 2019.

EPA’s Interpretive Statement comes at a critical time when the U.S. Supreme Court is set to address the question of “[w]hether the [CWA] requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, such as groundwater” (see SCOTUSblog) in its review of the Ninth Circuit decision in County of Maui v. Hawaii Wildlife Fund (Maui).  A petition for U.S. Supreme Court review is also pending on the Fourth Circuit decision in Kinder Morgan Energy Partners v. Upstate Forever (Kinder Morgan), which held similarly to Maui that “a discharge that passes from a point source through ground water to navigable waters may support a claim under the CWA.”  A pair of September 2018 Sixth Circuit decisions (Kentucky Waterways Alliance v. Kentucky Utilities Co. and Tennessee Clean Water Network v. TVA) expressly disagreed with the holdings in Maui and Kinder Morgan -- resulting in a “circuit split.”  Although the facts in Maui (wastewater injected into UIC wells) and Kinder Morgan (gas spilled from underground pipeline) may not involve activities common in agriculture and pesticide applications, the new judicial “tests” created in these decisions could dramatically expand the scope of the NPDES universe in ways that could potentially implicate agricultural/pesticide practices.  For example, in Maui, the Ninth Circuit held that Maui County’s discharges from UIC wells to groundwater should require CWA discharge permits because the pollutants from the UIC wells that reached a navigable water were “fairly traceable” and levels reaching the navigable water were “more than de minimis.”  The Ninth Circuit’s Maui holding could be stretched broadly to support the assertion that pesticides and fertilizers applied to agricultural lands that migrate through groundwater and eventually reach a CWA jurisdictional water could be subject to NPDES permitting.  Agriculture and pesticide stakeholders may wish to closely monitor developments around groundwater discharge issues at EPA and the U.S. Supreme Court.