U.S. Supreme Court Establishes Middle Ground on Clean Water Act Regulation of Point Source Pollutant Discharge and Travel Via Groundwater

In County of Maui v. Hawaii Wildlife Fund,[1] the United States Supreme Court provided its latest decision on the regulatory reach of the federal government to control discharge of pollutants into navigable waters under the Clean Water Act (“CWA”). Justice Breyer, writing for the majority,[2] framed the question presented as whether the CWA requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source — in this case, groundwater. This client alert briefly reviews the Court’s opinion and provides comments on likely implications for industry.

Holding: A six to three majority held that, in order to effectuate the purpose and intent of the CWA, a permit is required if the addition of pollutants through groundwater is the “functional equivalent of a direct discharge” from the point source into navigable waters. The Court noted that time and distance are important considerations in making this determination, and offered a list of other factors to be considered in the analysis of whether a permit is required. The Court did not accept the Ninth Circuit’s view that a permit was required because the pollutants were “fairly traceable” to the point source. The Court also rejected the Petitioner’s and Amicus Curiae Solicitor General’s argument that a discharge from a point source does not require a permit if it travels through any amount of groundwater or other medium before reaching a navigable water.

Facts:  The CWA forbids the “addition” of any pollutant from a “point source” to “navigable waters” without a permit from the Environmental Protection Agency (“EPA”).[3] The point source in this case is the County of Maui’s wastewater treatment plant, which pumps about four million gallons of effluent each day into underground wells.  The effluent then travels about a half mile through groundwater to the Pacific Ocean. Environmental groups brought a citizen suit under Section 505(a) of the CWA, claiming that Maui was discharging a pollutant into navigable waters. The district court found the discharge from Maui’s wells into nearby groundwater was functionally discharge into a navigable water.[4] The Ninth Circuit affirmed, finding Maui liable under the CWA because a permit is required when “the pollutants are fairly traceable from the point source to a navigable water such that the discharge is the functional equivalent of a discharge into the navigable water.”[5] The County of Maui petitioned for certiorari. The Court granted the petition in light of the differences in the standards adopted by different courts of appeal.[6]

The Court Rejected the Ninth Circuit’s “Fairly Traceable” Test: The Court rejected the “fairly traceable” test because it may allow permitting authority over the release of pollutants that reach navigable waters many years after their release and in highly diluted forms. First, the Court found such broad authority could result in requiring a permit in surprising or bizarre circumstances, such as pollutants carried to navigable waters on a bird’s feathers, or the more mundane instance of 100-year migration of pollutants through 250 miles of groundwater. Second, the Court noted that Congress intended to leave regulation of groundwater to the States, and veered away from “interfering as seriously” with State’s traditional regulatory authority as the “fairly traceable” test would. Third, the Court looked to legislative history, noting that in considering the bills that became the CWA, Congress rejected amendments that would have exerted federal authority over groundwater and left general groundwater regulatory authority to the States. Finally, the Court observed that its holding was consistent with EPA’s longstanding practices. Traditionally, the agency has exercised permitting authority over pollution discharges from point sources that reach navigable waters after traveling through groundwater only if there is a “physically and temporally direct hydrologic connection to surface water.”[7] Further, the EPA has rejected authority over discharges that reach navigable waters only after many if not hundreds of years.[8] The Court concluded this comparatively narrow view of the statute comports with the language and context of the Act and is administratively workable.

The Court Rejected the Petitioner’s and Solicitor’s Approaches:  The Court rejected as too narrow the County of Maui’s and the Solicitor’s argument that the CWA’s permitting requirement does not apply if a pollutant must travel through any amount of groundwater before reaching navigable waters. The Court noted that an outfall pipe could be located a few yards back from the edge of a navigable water and avoid the permit requirement, but the pollutant discharged from the pipe would still reach the navigable water. The Court concluded Congress could not have intended to leave such a large and obvious loophole in the CWA. The Court did not find EPA’s recent Interpretive Statement, which espoused this narrow approach, to be either persuasive or reasonable.[9] The Court found the EPA’s recent view to be difficult to reconcile with the statute’s reference to “any addition” of a pollutant to navigable waters, and the statute’s inclusion of “wells” in the definition of “point source,” because wells ordinarily discharge into groundwater.

Justice Breyer engaged with a textual argument in examining the statute’s use of the word “from” (the permit requirement applies when a pollutant is discharged from a point source to a navigable water) and employed several entertaining analogies. For example, Justice Breyer noted a traveler may arrive at a hotel from a train station, from Baltimore, from Europe, or from any two or all of those places. Just because the traveler most recently came “from” the train station does not obviate the fact that they also came “from” Baltimore and/or Europe.  In parsing the statute’s use of the word “addition” (a permit is required for addition of a pollutant from a point source to a navigable water), Justice Breyer noted “[i]f Timmy is told to ‘add water to the bath from the well,’ he knows just what it means – even though he will have to use a bucket to complete the task.”

The Court’s Middle Ground:  The Court found the interpretations of the parties, the Solicitor and the dissents[10] too extreme, and instead adopted a middle ground that requires a permit “when a point source directly deposits pollutants into navigable waters or when the discharge reaches the same result through roughly similar means.” Acknowledging that its decision does not establish a convenient bright line for implementation purposes, the Court nevertheless identified some extreme situations that likely fall on either side of the line based on time, distance and other factors. For example, where a pipe ends a few feet from a navigable water, and the pipe emits pollutants that travel through groundwater or over the surface to the navigable water, the permitting requirement clearly applies.  On the other hand, if the pipe ends 50 miles away from the navigable water, and the pollutants mix with other material and end up in navigable waters only many years later, the permitting requirement likely does not apply.

The Court acknowledged the difficulty will be in interpreting when the permitting requirement applies in intermediate circumstances. The Court left such interpretations to the lower courts, but provides some helpful guidelines.  First and foremost, the object of the analysis is to advance the statutory purposes Congress sought to achieve. Focusing on the use of the word “from,” the Court concluded that whether pollutants that arrive at a navigable water after traveling through groundwater are “from” a point source “depends on how similar to (or different from) the particular discharge is to a direct discharge.”  The Court suggests the following factors may be relevant to the analysis depending upon the circumstances:

(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, and

(7) the degree to which the pollution (at that point) has maintained its specific identity.

The Court states that time and distance will be the most important factors in most cases, but not necessarily every case. The Court further cautions that lower court decisions should not create serious risks either of undermining state regulation of groundwater or of creating loopholes that undermine the statute’s basic federal regulatory objectives. The Court finally notes that EPA has demonstrated over 30 years that such an administrative approach is manageable, and that penalties for violations can be calibrated to take into account the seriousness of the violation, good faith efforts to comply with the statute, economic impact of the penalty on the violator, and whether a party could reasonably have thought that a permit was not required.

Justice Kavanaugh filed a separate concurrence, finding the majority’s interpretation of the word “from” to be consistent with Justice Scalia’s Rapanos plurality opinion.[11] First, Justice Scalia acknowledged that addition of pollutants to navigable waters can occur through an intermediary conveyance, such as an intermittent stream channel. Second, Justice Scalia noted that the statute does not establish a bright line test, and here, the Court seeks to translate the vague statutory text into more concrete guidance.  Justice Kavanaugh rebuts Justice Thomas’s dissenting argument that the majority provides no guidance as to which factors are most important, pointing to the majority’s emphasis on time and distance, which will help guide application of the standard going forward.

Implications for Dischargers: The Court’s establishment of the “functional equivalent” test settles the controversy regarding whether any travel through groundwater or another medium eliminates the permit requirement for point source discharges. However, the Court did not establish a bright-line test, but leaves to the lower courts the case by case analyses to determine whether a permit is required in particular circumstances. The Court’s identification of several factors, most important of which are time and distance of travel through groundwater, will assist regulators and dischargers in these determinations. Clearly, locating a point source far away from a navigable water and in geologic or hydrologic circumstances that slow the travel of groundwater and mix the pollutant with other substances will strengthen an argument that no CWA permit is required, although regulatory restrictions under other laws may apply.

Dischargers will need to assemble and present evidence on the seven key factors the Court articulated. The services of experts such as geologists, hyrdologists, water quality chemists, modeling experts, and geographic information systems experts will be needed. Attorneys advising clients on permit requirements, and defending assertions that no permit is required, will need to pay close attention to all of the factors set out by the Court. These same factors, evidence of investigation of the key factors, and good faith assumptions that rely on credible data will be important in “calibrating” penalties in enforcement situations.

The Court’s interpretation may have implications for regulation of discharge of dredged and fill material under Section 404 of the CWA.  The question under Section 404 is whether travel through groundwater (i.e., a “groundwater connection”) can establish a sufficient connection between an upstream water feature and a downstream navigable water so that fill in the upstream water feature requires a Section 404 permit. The current administration declines to adopt this view. Parties and courts may analogize to the Court’s reasoning in County of Maui to assert that such reasoning should likewise apply to establish regulatory jurisdiction under Section 404 to areas connected to navigable waters by a groundwater connection.

Modrall Sperling’s Natural Resources group assists clients with Clean Water Act compliance. For further information, contact Joan Drake at jdrake@modrall.com, Walter Stern at western@modrall.com, Stuart Butzier at sbutzier@modrall.com, Christina Sheehan at ccs@modrall.com, and Sarah Stevenson at sarah.stevenson@modrall.com.

 

[1] Slip Op. (April 23, 2020), available at: https://www.supremecourt.gov/opinions/19pdf/18-260_jifl.pdf.

[2] Justice Breyer wrote for the majority, joined by Chief Justice Roberts and Justices Ginsburg, Sotomayor, and Kagan. Justice Kavanaugh filed a separate concurrence, and Justices Thomas (joined by Justice Gorsuch) and Alito filed separate dissents.

[3] Federal Water Pollution Control Act, §§301(a), 502(12)(A), as amended by the Federal Water Pollution Control Act Amendments of 1972 (Clean Water Act) §2, 86 Stat. 844, 886, 33 U. S. C. §§1311(a), 1362(12)(A).

[4] 24 F. Supp. 3d 980, 998 (D. Haw. 2014).

[5] 886 F.3d 737, 749 (9th Cir. 2018).

[6] Compare 886 F. 3d, at 749 (“fairly traceable”), with Upstate Forever v. Kinder Morgan Energy Partners, L. P., 887 F. 3d 637, 651 (4th Cir. 2018) (“direct hydrological connection”), and Kentucky Waterways Alliance v. Kentucky Util. Co., 905 F. 3d 925, 932–938 (6th Cir. 2018) (discharges through groundwater are excluded from the Act’s permitting requirements).

[7] See, e.g., In re Bethlehem Steel Corp., 2 E.A.D. 715, 718 (EAB 1989).

[8] See, e.g., McClellan Ecological Seepage Situation (MESS) v. Cheney, 763 F. Supp. 431, 437 (E.D. Cal. 1989).

[9] 84 Fed. Reg. 16810. The Court noted that no party requested the Court apply Chevron deference but nevertheless acknowledged the agency’s expertise, knowledge, and familiarity with interpretive demands of administrative need.

[10] Justice Thomas (joined by Justice Gorsuch) and Justice Alito filed separate dissents. Justice Thomas asserted he would adhere to the text of the statute and would require a direct discharge of pollutants “into” navigable waters and from a point source, not from groundwater. (It is interesting to note the statute uses the word “to” but not “into.”) The majority rejected Justice Thomas’s arguments because they are inconsistent with the text and would create “massive” and “absurd” loopholes to the permitting scheme Congress established (i.e., a pipe ending a few feet away from a navigable water or extending over the navigable water and adding effluent to the air through which the pollutants would fall into the navigable water would not require a permit). Justice Alito criticizes the majority for its interpretation of the word “from” and for not establishing a bright line test for what constitutes a “functional equivalent to a direct discharge.” Justice Kavanaugh rebuts this assertion noting that the majority points to time and distance as the most important factors, and the Court’s opinion rejects Justice Alito’s disregard for the majority’s “inventive analogies.”

[11] Rapanos v. United States, 547 U.S. 715 (2006).

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