The Ninth Circuit and Fourth Circuit have joined a growing number of lower courts finding that the Clean Water Act (“CWA” or the “Act”) regulates discharges to groundwater that serves as a conduit between a point source and waters of the United States. 

This is a critical issue for energy companies, whose operations can result in releases to groundwater through spills, accidental discharges, and seepage from ash and other retention ponds. Under the so-called “conduit” theory adopted in recent court decisions, these releases are subject to regulation under the CWA and can serve as the basis for citizen-suits when pollutants migrate through groundwater and reach jurisdictional surface waters.

Clients with potential indirect discharges through groundwater should monitor this rapidly developing area closely and seek legal counsel if they have questions regarding the CWA’s applicability to their operations. Plaintiff groups are now squarely focused on this avenue of CWA liability; other appellate courts are poised to address this issue and Supreme Court review is possible; meanwhile, both Congress and state and federal agencies are considering potential responses to these court decisions, with EPA currently soliciting public comments on this issue.

Recent Appellate Decisions Imposing CWA Liability for Indirect Discharges Through Groundwater

Courts agree that the CWA does not regulate groundwater itself, and that an unpermitted discharge alone does not violate the Act. Courts have wrestled, however, with whether CWA liability may be imposed for discharges to groundwater that is hydrologically connected to jurisdictional surface waters.

The Ninth Circuit Adopts the Conduit Theory

In February 2018, the Ninth Circuit expanded CWA liability for indirect discharges through groundwater, holding that discharges to groundwater are actionable if there is a “fairly traceable” connection between the groundwater discharge and pollutants reaching other jurisdictional surface waters. See Hawai'i Wildlife Fund v. County of Maui, 886 F.3d 737 (9th Cir. 2018). The case was the first appellate decision to apply directly the “conduit” theory and impose CWA liability for discharges through groundwater.

In County of Maui, the county owns and operates four injection wells at its municipal wastewater treatment plant, which are the county’s primary means of effluent disposal. Environmental groups sued the county, alleging it violated the CWA because pollutants injected into the wells percolated through groundwater and reached the Pacific Ocean.

The Ninth Circuit concluded that these discharges are regulated under the CWA, and thus the county’s failure to obtain an NPDES permit for them was a violation of the Act. Adopting a new standard of liability for indirect discharges through groundwater, the court held CWA permitting requirements apply where three conditions are met:

(1) pollutants are discharged from a point source, such as an injection well, treatment pond, or any other discernible, confined, or discrete conveyance;

(2) 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”; and

(3) “the pollutant levels reaching [the] navigable water are more than de minimis.”

The decision, however, left important questions unanswered. For example, the court did not explain what is required to demonstrate that pollutants passing through groundwater are “fairly traceable” to a point source. Nor did the court explain how much pollution is sufficient to impose liability versus the “de minimis” level that is not.

The Fourth Circuit Follows Suit

In April 2018, a divided panel of the Fourth Circuit became the second appellate court in as many months to adopt the conduit theory of liability, finding that the CWA covers discharges to groundwater with a “direct hydrological connection” to jurisdictional surface waters. See Upstate Forever v. Kinder Morgan Energy Partners, L.P., --- F.3d ---, 2018 WL 1748154 (4th Cir. Apr. 12, 2018). In addition, the Fourth Circuit also found that, despite repair of the pipeline that caused the spill, environmental groups had standing to maintain their citizen suit because the continued migration of pollutants from the spill site to jurisdictional waters is an “ongoing violation of the CWA.”

In Kinder Morgan, approximately 369,000 gallons of gasoline accidentally spilled from an underground pipeline near Belton, South Carolina. The pipeline operator repaired the pipeline shortly after the spill; implemented remediation and recovery measures required by state regulators; and recovered 209,000 gallons of gasoline from the spill site. Nevertheless, environmental groups brought a citizen suit under the CWA, alleging that actions taken by the pipeline operator were insufficient to abate the pollution, and that gasoline and other pollutants were continuing to seep from the spill site, through groundwater, into surface waters regulated under the Act.

A divided panel of the Fourth Circuit held that the CWA regulates the pollutants discharged from a point source (e.g., a ruptured pipeline) through groundwater into jurisdictional surface waters. The majority found that the CWA regulates discharges from point sources that reach navigable waters—either directly or indirectly—so long as the discharges are “sufficiently connected to navigable waters” and “the connection between a point source and navigable waters” is “clear.” The majority emphasized, however, that there must be a “traceable discharge” from the point source and cautioned that “traceability in measurable quantities is an important factor in the determination of whether a particular discharge is covered by the CWA,” explaining that this determination “is necessarily fact specific.”

In a second important aspect of the court’s decision, the Fourth Circuit rejected arguments by the pipeline operator that repairing the pipeline and halting the flow of gasoline from the point source barred the environmental groups from bringing a citizen suit. As the majority acknowledged, the CWA does not permit citizen suits for past violations, but rather allows such suits to be brought only for “prospective relief” in cases involving “ongoing violations.” The majority found, however, that repair of the pipeline did not “render the CWA violation wholly past.” Looking to the CWA’s definition of “discharge”—which means “any addition of pollutants to navigable waters from a point source”—the majority reasoned that ongoing seepage of gasoline was continuing to “add” pollutants to jurisdictional waters. And because those pollutants were “from a point source”—that is, they originated from the pipeline—there was a continuing and ongoing discharge in violation of the CWA.

Notably, the majority focused on asserted inadequacies of the operator’s abatement program, discussing at length the role citizen suits play under the CWA in “abat[ing] pollution when the government cannot or will not command compliance.” This underscores the importance of a robust clean-up program in response to spills and suggests that a more thorough abatement program that effectively limited the flow of pollutants to jurisdictional waters might have led to a different result.

The pipeline operator has filed a petition for panel rehearing and rehearing en banc, which is currently pending before the Fourth Circuit. This is potentially significant because a separate panel of the Fourth Circuit in Sierra Club v. Virginia Electric Power Co., No. 17-1895 (4th Cir. filed August 2, 2017), had expressed some skepticism about whether indirect discharges through groundwater are regulated under Section 402 of the CWA. At the same time, the Sixth Circuit is poised to address this issue in Tennessee Clean Water Network v. Tennessee Valley Authority, No. 17-6155 (6th Cir. filed April 12, 2018), a case with extensive amicus involvement that could further cement the conduit theory or create a clear circuit split, perhaps increasing the likelihood of Supreme Court intervention.

EPA’s Request for Comments

Shortly after the Ninth Circuit’s decision in County of Maui, EPA requested comment on whether the agency should clarify its position regarding the regulation of discharges through groundwater and, if so, what form that clarification should take. Specifically, EPA is requesting comment on “the applicability of the CWA NPDES permit program to pollutant discharges from point sources that reach jurisdictional surface waters via groundwater or other subsurface flow that has a direct hydrologic connection to jurisdictional surface waters.” This includes:

• Whether “subjecting such releases to CWA permitting is consistent with the text, structure, and purposes of the CWA”;
• If EPA has authority to regulate discharges through groundwater, whether those discharges “would be better addressed through other federal authorities as opposed to the NPDS permit program”; and
• Whether “some or all such discharges are addressed adequately through existing state statutory or regulatory programs or through other existing federal regulations and permit programs.”

In the same request, EPA also seeks comments on whether it should “clarify its previous statements concerning pollutant discharges to groundwater with a direct hydrologic connection to jurisdictional water in order to provide additional certainty for the public and the regulated community.” This could address the CWA’s applicability to hydrologically connected groundwater; define activities that would be regulated beyond direct discharges to jurisdictional surface waters (i.e., placement on the land); and define which connections are sufficiently “direct” to be regulated. Comments are due by May 21, 2018.

Congress Gets Involved

The litigation surrounding this issue has generated interest in Congress. For example, an explanatory statement attached to the Consolidated Appropriations Act of 2018 specifically noted that “regulation of groundwater has remained outside of the Act’s jurisdiction,” but that “[r]ecently, courts have imposed a broad view of CWA liability based on a theory of hydrological connection between groundwater and surface water.” The committees thus “encourage[d EPA] to consider whether it is appropriate to promulgate a rule to clarify that groundwater releases from solid waste units are regulated under RCRA and are not considered point sources, and, that releases of pollutants through groundwater are not subject to regulation as point sources under the CWA.” The committees also directed EPA “to brief the Committees about its findings and any plans for future rulemaking” upon conclusion of the public comment process.

Likewise, the Senate Environment and Public Works Committee recently held hearings on the issue, revealing a sharp partisan divide. Republicans on the committee said CWA liability for groundwater discharges goes far beyond what Congress intended in the Act and suggested the need for a legislative fix. Democrats, in contrast, said the recent court decisions are correct and reflect a “clear” understanding of the statutory text.

What Should Clients Do?

These court decisions will encourage and bolster citizen suits—and potentially other enforcement actions in certain states—seeking to impose liability for groundwater discharges. The law remains unsettled, however, as these issues continue to move through the courts. Clients with potential discharges to groundwater should:

• Consider their exposure, including whether the receiving groundwater body is isolated and confined or whether it may be hydrologically connected to surface waters constituting waters of the United States; they should seek competent legal counsel to address any questions or to understand how these issues may affect their businesses.
• Submit formal comments to EPA regarding the appropriate regulation of discharges through groundwater.
• Seek opportunities to influence the development of the law in this area, both by participating as amici curiae (either directly or indirectly through an industry association) in litigation at the appellate stage and by making their views known to members in Congress.