In rejecting guidance from the US Environmental Protection Agency, the Supreme Court concluded that a discharge to groundwater that reaches navigable waters is subject to the permitting requirements of the Clean Water Act if the discharge is the “functional equivalent of a direct discharge” to navigable waters.
A six-justice majority of the US Supreme Court held in County of Maui v. Hawai’i Wildlife Fund, No. 18-260 (Apr. 23, 2020), that the Clean Water Act (CWA or Act) 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.” The decision not only resolved an apparent circuit split, but also is notable for its rejection of US Environmental Protection Agency (EPA) guidance—issued while the case was pending before the Court—in which EPA opined that “releases of pollutants to groundwater are categorically excluded from the Act’s permitting requirements.”
The Court concluded that the language, structure, and purposes of the Act compelled the conclusion that the Act’s reach is not so limited, and that the Act’s coverage extends to the “functional equivalent of a direct discharge” to navigable waters, including potentially a discharge of pollutants that travels through groundwater before reaching navigable waters.
The Court identified seven factors that may prove relevant in assessing whether a discharge is the “functional equivalent of a direct discharge,” but acknowledged that the question would have to be answered on a case-by-case basis. Because the US Court of Appeals for the Ninth Circuit applied a different standard in holding that the discharges at issue were covered by the Act, the Court vacated the Ninth Circuit’s decision and remanded the case for further proceedings consistent with its opinion.
The County of Maui operates a sewage treatment facility on the island of Maui, Hawaii. After partially treating sewage collected at the facility, the facility injects the treated sewage into wells deep underground. The treated sewage then travels about a half mile through groundwater to the Pacific Ocean.
In 2012, environmental groups sued the county, alleging it had violated the CWA by discharging pollutants to navigable waters without a CWA permit. The county argued it had not violated the CWA’s prohibition on “the discharge of a pollutant” without a permit because “discharge of a pollutant” is defined as the “addition of any pollutant to navigable waters from any point source,” and the discharges from the county’s wells were to groundwater, not navigable waters.
The district court granted summary judgment in favor of the environmental groups, concluding that the discharge from the county’s wells was “functionally one into navigable water.” The Ninth Circuit affirmed, but articulated the applicable standard differently, stating the question is whether “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.” (Emphasis added.)
In December 2018, after the county filed its petition for a writ of certiorari, the Supreme Court invited the US solicitor general to file a brief expressing the views of the United States. The solicitor general urged the Court to grant certiorari to resolve a circuit split, noting that both the Ninth and Fourth Circuits had held that a discharge to groundwater that reached navigable waters was covered by the Act. However, the Sixth Circuit, in two recent decisions, disagreed with the Fourth and Ninth Circuits and held that releases of pollutants from coal ash ponds to groundwater without a permit did not violate the Act, even though the pollutants subsequently entered navigable waters.
The Supreme Court granted certiorari in February 2019. On April 15, 2019, EPA issued an interpretative statement in which it sought to clarify the application of the CWA’s permitting requirements to groundwater. After performing “a holistic analysis of the statute, its text, structure, and legislative history, the Agency conclude[d] that the CWA is best read as excluding all releases of pollutants to groundwater.”
In its decision, the Supreme Court concluded that a categorical exclusion of all releases of pollutants into groundwater, as advocated by EPA, is too narrow because it “would risk serious interference with EPA’s ability to regulate ordinary point source discharges.” The Court noted that such an interpretation would allow a pipe owner to avoid the CWA’s permitting requirements by moving its pipe a few yards, so that its discharge travels some distance through groundwater before reaching navigable waters. The Court determined that “such an interpretation is neither persuasive nor reasonable,” as it would create “a large and obvious loophole,” allowing for easy evasion of a key CWA provision.
The Court also concluded, however, that the Ninth Circuit’s “fairly traceable” test was too broad. The Court noted that the Ninth Circuit’s focus on traceability “would require a permit in surprising, even bizarre circumstances, such as for pollutants carried to navigable waters on a bird’s feather.” According to the Court, both the structure and legislative history of the CWA also make clear that Congress intended to leave substantial responsibility over groundwater pollution to the states. Finally, the Court reasoned that EPA’s “longstanding regulatory practice” of applying and arguing for a comparatively narrower view of the statute in the lower courts undermined the Ninth Circuit’s broad interpretation.
Having examined the statute’s language, structure, and purposes, 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” into navigable waters. (Emphasis in original.) The Court concluded that “this phrase best captures, in broad terms, those circumstances in which Congress intended to require a federal permit.”
The Court recognized the difficulty in not have a bright-line standard, but observed that “there are too many potentially relevant factors . . . to use more specific language.” The Court identified the following as potentially relevant factors, with time and distance being the most important in most cases:
The Court stated that it would fall to the lower courts and, perhaps EPA, to provide guidance on how to apply the Court’s holding on a case-by-case basis with the objective of arriving at a decision that is consistent with the statute and congressional intent.
The Supreme Court’s decision provides a framework for analyzing whether the CWA’s permitting requirement applies to indirect discharges from point sources into navigable waters, but concludes the answer necessarily is driven by case-specific facts. The question of what constitutes the “functional equivalent of a direct discharge” thus is likely to be a question of significant future litigation and debate, just as the question of what constitutes a “navigable water” has been.
Indeed, the Court’s decision could lead environmental groups to revisit the question of whether releases of pollutants from coal ash ponds, which the Sixth Circuit found not to be covered by the Act, are the “functional equivalent of a direct discharge,” and thus subject to the Act’s permitting requirements. Although no party argued that the Court should give Chevron deference to EPA’s interpretation of the statute, the Court’s decision certainly exhibits a lack of deference to the Agency’s interpretation, perhaps providing fodder for future challenges to federal agency statutory interpretations.
The decision also will require EPA to revisit its interpretative statement and consider the issuance of administrative guidance on the application and implementation of the Court’s decision.
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