We hope that this Advisory finds you and your family feeling and managing well; we are glad to report at the outset that it will have nothing to do with COVID-19. Instead we wanted to share our perspective on last week's major Supreme Court decision under the Clean Water Act (CWA). We invite you as you read it to think of the island of Maui and the blue waters of the Pacific Ocean, which is where this case is focused, or some other beautiful location that we hope you will be able to visit soon.
What was the issue?
The issue in County of Maui v. Hawaii Wildlife Fund, one which had long divided the lower courts, was this: everyone agrees that the Clean Water Act regulates, and requires National Pollution Discharge Elimination System (NPDES) permits for, the discharge of pollutants to waters of the United States from point sources; and everyone agrees that the Clean Water Act does not require a permit for discharges to groundwater; so is a permit required for discharges that travel from a point source to groundwater and from there to a water of the United States? Or to put the question in the context of the facts of the case, did the County of Maui need to a permit to discharge millions of gallons of partially treated wastewater every day to underground wells where it then flowed through groundwater and emerged from submarine springs in the Pacific Ocean half a mile away?
Lower courts confronting the status of discharges to groundwater, in circumstances where the groundwater serves as a conduit to surface waters, had taken a number of disparate approaches, including (i) that the CWA does not cover those discharge because the point source did not discharge directly to surface waters (i.e., never); (ii) that such discharges were covered by the CWA only when there was a direct hydrological connection between the surface water and the groundwater (i.e., sometimes); and (iii) that such discharges were covered as long as the eventual discharge to the surface water could be traced to what came out of the point source (i.e., oftentimes). As discussed below, EPA and the Department of Justice, which had long taken a variation on the "sometimes" approach and had supported the environmental group plaintiff in the Ninth Circuit, switched sides and took essentially a "never" approach in the Supreme Court.
What did the Court decide?
The Supreme Court in, a six-three decision written by Justice Breyer, said that Maui needed a permit, and adopted a fairly narrow "sometimes" approach; but it did so without setting forth a bright line, or even dim line, standard. Rather, the Court announced a new test that will depend on at least seven factors, maybe more, with the application of those factors left to the lower courts. The holding itself was easy for Justice Breyer to state: "We conclude that the statutory provisions at issue require a permit if the addition of the pollutants through groundwater is the functional equivalent of a direct discharge from the point source into navigable waters." So the phrase that every Clean Water Act lawyer will now want to have on speed dial is "functional equivalent." What does that mean?
The Court recognized that the new functionally equivalent test required definition, and so it identified a non-exclusive list of seven factors, giving presumptive predominance to two of them. The Court stated:
But there here are too many potentially relevant factors applicable to factually different cases for this Court now to use more specific language. Consider, for example, just some of the factors that may prove relevant (depending upon the circumstances of a particular case): (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. Time and distance will be the most important factors in most cases, but not necessarily every case.
So the Court is telling the public, the regulated community, and the regulators that there are numerous factors to consider in determining functional equivalency, that the listed seven are "just some" of them, and that time and distance will be the "most important" factors in "most cases" but not "every case."
In addition to the lack of guidance on how the factors should be weighted, there is none on how they should be scaled. For example, as to distance—say, between a pipe that discharges a pollutant into ground water and the surface water into which the pollutant is eventually carried—what is too far to treat as the functional equivalent of a discharge directly into the surface water? While the Court suggests that a few feet would be considered close enough, would 50 miles be categorically too far? The Court suggests it may not, by giving this example: "If the pipe ends 50 miles from navigable waters and the pipe emits pollutants that travel with groundwater, mix with much other material, and end up in navigable waters only many years later, the permitting requirements likely do not apply." So a discharge that traverses 50 miles through groundwater over many years and mixes with other materials on the way "likely" doesn't require a permit; but remarkably, even that is not a foregone conclusion.
The potential morass that this could lead to was a principal focus of the dissents, particularly by Justice Alito. He began this way: "If the Court is going to devise its own legal rules, instead of interpreting those enacted by Congress, it might at least adopt rules that can be applied with a modicum of consistency. Here, however, the Court makes up a rule that provides no clear guidance and invites arbitrary and inconsistent application."
How Did the Court Reach this Decision?
While other Supreme Court decisions interpreting the Clean Water Act have turned on the meaning of a variety of defined statutory terms like "point source," "pollutant," and "waters of the United States," in Maui the Court focused on the deceptively simple preposition "from"; it viewed the issue as whether the ocean discharge was "from" the point source, "from" the groundwater, or "from" both. After considering a number of examples of how "from" might be used in everyday speech—including to describe immigrants from Finland, travelers from Europe who stopped in Baltimore, and meat drippings in a pan—Justice Breyer concluded that a discharge, like a person or gravy, could come from multiple places.
The Court was concerned about how a rule categorically precluding CWA application to discharges to groundwater could result in circumvention of CWA permitting requirements. The vast majority of sewage treatment plants in the country discharge directly to surface waters, are required to treat to CWA standards, and must secure a NPDES permit. Yet Maui was sending its partially treated sewage into the Pacific Ocean every day without an NPDES permit; under the view of those who contend that discharges to groundwater never need a NPDES permit, state law, not the CWA, was the only way to deal with this pollution. In adopting a functional equivalency test, the Court was essentially saying that if it walks like a point source discharge and quacks like a point source discharge (and meets five or more other criteria), it likely is a point source discharge regulated by the CWA.
Why Didn't the Court Give Deference to the Position of the United States?
As mentioned above, one notable feature of the Maui litigation is the position taken by the United States, which has shifted substantially over time. In the court of appeals, the Department of Justice filed a brief supporting the plaintiffs, on the theory that the CWA's permitting requirement applies to discharges that migrate through groundwater with a "direct hydrological connection" to surface waters. But in February 2018, the EPA called for comments on whether it should change its interpretation; and in April 2019, shortly after the Supreme Court granted certiorari, the agency published an Interpretive Statement adopting the "never" view - i.e., that discharges to groundwater are categorically excluded from the permitting program. In line with the EPA's newfound position, the United States supported the County of Maui in its brief on the merits—though, significantly, did not argue that the EPA's newfound views were entitled to deference under Chevron. The Court accordingly declined to defer to the agency's interpretation, which it called unpersuasive and unreasonable in any event.
The government's failure to invoke Chevron in this case reflects a broader trend, in litigation led by the Department of Justice, away from relying on deference to agency expertise. Even where an agency administers a statute that calls for technical judgments or complex interest-balancing—a category that arguably includes the CWA—the Department has increasingly defended agency interpretations solely on the ground that they provide not merely a permissible reading of the statute, but the best one. That approach, which denies the agency privileged interpretive status, likely decreases the agency's influence in the short-term: Courts cannot simply defer to an agency's reasonable views; for the same reason, regulated entities and the public may need to think twice before treating such views as a predictable guide to how a particular interpretation is likely to fare in litigation.
But declining to lean on Chevron may ultimately lead to greater long-term stability. Whereas agency views often change with a new administration, judicial interpretations are far less likely to be reconsidered. That dynamic looms particularly large in high-stakes litigation, like the ongoing challenges to the EPA's rollback of the Clean Power Plan and Waters of the United States rules, in which the agency's position is understood as hinging on the outcome of the upcoming presidential election. The decision in Maui notwithstanding, in most cases the current Administration may prefer to take its chances with the Supreme Court.
What Does the Decision Mean in Practical Terms ?
In considering the ramifications of the decision, there are a number of important aspects to consider.
First, the decision grants EPA broader CWA jurisdiction than it had asked for, after EPA had done a 180-degree flip on its long-held position. So the long term ramifications of the decision, like a great many other things, will depend in large part on who is running EPA after January 20, 2021, In the short term, EPA is unlikely to take an expansive view of the decision or focus significant enforcement resources on indirect discharges (although changes could come sooner in states that implement the NPDES permit program based upon delegated authority from EPA).
Second, for those who see the sky falling because of the fact-sensitive and outcome-driven vagaries of the new multi-part test, it is worth remembering that the new standard is narrower and not altogether muddier than the standard EPA had been using and advocating for years. And as the Court in Maui emphasized, even though EPA had sought for over 30 years sought to require permits for "some (but not to all) discharges through groundwater" there was no evidence that that had created an "unmanageable expansion" of the program. On the other hand, to the extent the functional equivalence test is reminiscent of another broad CWA test previously authored by Justice Kennedy—the "significant nexus" test, which Justice Kennedy held in 2006 should govern whether waters are subject to CWA jurisdiction 1 —we may be in for a great deal of uncertainty for the foreseeable future.
Third, EPA will surely consider whether to try to provide clarity in this space by promulgating a rule defining functional equivalency, as it has been trying to do on the "Waters of the United States" issue. The Maui Court mentioned such a rule or guidance, or even general permits, as possible options. But one wonders whether EPA would want to take that on, given both the enormous challenge of trying to quantify the Court's factors in some meaningful way and the certain litigation that would ensure in district courts around the country if such a rule were promulgated.
Fourth, it is important to remember that the impact of this decision will vary greatly by state. Every state has authority to regulate discharges to groundwater 2, and some have integrated permitting programs that regulate discharges to both surface water and groundwater. Therefore, in many states, even if a discharge like Maui's had not triggered CWA treatment and permitting requirements, state authorities would have required modern levels of wastewater treatment prior to any discharge, including a discharge to groundwater. Going forward, if EPA fails to adopt rules, states that implement the NPDES program under delegation from EPA are likely to develop new requirements and to issue general permits that address how the factors giving rise to functional equivalency should be weighted and scaled.
Fifth, the decision may have its greatest impact on CWA citizen suits asserting that certain indirect discharges are illegal because they lack a permit. And while defendants in such cases will have to contend with the vagaries of the multi-part test (which could make early resolution on motion challenging), so will the citizen plaintiffs. That could discourage some citizen plaintiffs and their counsel from initiating cases in this area. But others may view the indeterminacy as a powerful lever to get facilities that are discharging to groundwater to abate the discharges or face challenging and uncertain litigation.
Sixth, facilities whose discharges to groundwater may be impacting surface waters in ways that might be viewed unfavorably under the Maui standard will need to consider whether there could be advantages to preemptively applying for an NPDES permit. Facilities that do so will have their discharge conditions determined by a state regulator, with experience and expertise in wastewater management, rather than risking a citizen suit before a federal judge. Regulated entities may also wish to explore whether there are mechanisms for obtaining a jurisdictional determination from the relevant regulatory agency or agencies before making major investments that could be affected by whether NPDES permits are required. Of course, while such a determination would prove valuable should a citizen suit arise, it would not be an absolute bar to such a suit. After all, EPA told the Supreme Court that Maui did not need a permit, and the Supreme Court has now disagreed and Maui will now have to get an NDPES permit.
1 Rapanos v United States, 547 U.S. 714 (2006).
2 In fact, Section 402(b)(1)(D) of the Clean Water Act, 42 U.S.C. 402(b)(1)(D) requires a state seeking to administer its own NDPES program to have authority "to control the disposal of pollutants into wells."
Originally published Apr 28, 2020.
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