Washington, D.C. (April 30, 2020) - Seeking to address a longstanding environmental law question of what circumstances require a Clean Water Act (CWA) permit from a "point source," the U.S. Supreme Court's decision on April 23, 2020 in County of Maui v. Hawaii Wildlife Fund established a new test that even the Court realized may result in greater confusion rather than less. The Court held that the CWA requires a permit "when there is a direct discharge of a pollutant from a point source into navigable waters or "when there is the functional equivalent of a direct discharge" (emphasis added). Opinion at 15. The Opinion's newly promulgated "functional equivalent" standard is likely to produce significant regulatory uncertainty and spur litigation. Interested parties should review the case closely in evaluating what risks it presents for their permitting decisions, and seek advice of counsel as needed.
Even the Supreme Court Recognizes the Need for Guidance
The case involved a wastewater treatment plant that pumps treated sewage water into the ground through four wells. From there, the effluent travels half a mile through groundwater to the Pacific Ocean. The statutory language requires a permit for "any addition" of a pollutant from a point source to navigable waters, and the lower courts offered various interpretations to construe the effluent's journey as the equivalent of a "direct discharge." The district court spoke in terms of a "functional" release into navigable waters, and the Court of Appeals analyzed the discharge as "fairly traceable" to a point source. Indicative of the difficulty of the issue, even while adopting a similar approach in imposing a "functional equivalent" test, the Court recognized the lack of clarity of this standard and explicitly invited the U.S. Environmental Protection Agency (EPA) to provide regulatory guidance. Opinion at 17. Justice Alito's dissent went further, emphasizing that "the consequences to landowners [and municipal waste treatment operators] even for inadvertent violations can be crushing." Alito Dissent at 12.
EPA had previously issued an Interpretative Statement regarding the applicability of CWA permits to groundwater discharges, but for pragmatic reasons did not promulgate a formal rule, which takes a considerable amount of time. Now EPA will have to revoke its existing guidance as expeditiously as possible and issue (after public comment) a revised guidance providing specific direction to permittees, EPA regions, and the states reflecting the Court's Opinion. Ideally, EPA's guidance will be narrowly tailored to distinguish between the vast majority of discharges to groundwater that do not need a federal permit and the category that does, according to the new ruling.
Determining "Functional Equivalent"
In establishing its "functional equivalent" test, the Court listed "just some of the factors [that] may prove relevant" in determining whether a release qualifies as a direct discharge, stating that time and distance will be the most important factors in most cases. Key factors include:
- transit time;
- distance traveled;
- nature of the material through which the pollutant travels;
- extent to which the pollutant is diluted or chemically changed as it travels;
- amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source;
- manner by or area in which the pollutant enters the navigable waters; and
- degree to which the pollution (at that point) has maintained its specific identity.
Takeaways from the Supreme Court's Opinion
While the Court's factors are useful, they do not recognize the many practical and policy perspectives inherent in striking a balance between federal and state regulation of point and non-point discharges. EPA's guidance must be consistent with the distinctions Congress has drawn. As highlighted in the amicus brief filed by a dozen industry trade associations in the Supreme Court case, Congress explained that in the 1972 Act it had drawn a "clear and precise distinction between point sources, which [are] subject to direct Federal regulation, and nonpoint sources, control of which was specifically reserved to State and local governments." S. Rep. No. 95-370, at 8 (1977). Furthermore, EPA has long held the view that groundwater should be regulated by the states. In fact, the CWA explicitly provides the states the authority to regulate non-point sources. See 33 U. S. C. §§1285(j), 1314(f), 1329(i), 1329(b)(1), (h). Thus, to be consistent with this longstanding federal preference, the "functional equivalent" guidance must narrowly define the circumstances where a groundwater discharge is a functional equivalent to a "permitted" discharge.
Conclusion
Landowners, developers, and industrial dischargers may be significantly impacted by the Supreme Court's Opinion. Interested parties may want to explore all possible avenues for mitigating the negative impacts of the decision, including engagement with Congress and EPA.
Originally published April 30, 2020
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