The U.S. Supreme Court issued on April 23, 2020, a significant and controversial Clean Water Act (“CWA”) decision in County of Maui v. Hawaii Wildlife Fund et al. As summarized previously, the issue presented was whether the County of Maui (“County”) requires a CWA discharge permit to dispose of wastewater through groundwater discharge wells where the discharged waters ultimately reach the Pacific Ocean. Without determining if the County’s discharge requires a permit, the Supreme Court held that any discharge to groundwater that is the “functional equivalent” of a direct discharge into navigable waters requires a CWA permit. In its decision, the court struck a middle ground by declining to adopt the even more expansive “fairly traceable” standard adopted by the Ninth Circuit, or the bright line “groundwater doesn’t count” rule sought by the County and the U.S. Environmental Protection Agency (“EPA”).
The facts of this case are well known. The County operates the Lahaina Wastewater Reclamation Facility and four disposal wells that inject approximately 3 to 5 million gallons per day (“MGD”) of treated wastewater into groundwater. Some portion of the County’s discharges makes its way through groundwater to the Pacific Ocean. The County maintains that its wells do not require a CWA permit because they only indirectly discharge pollutants into the Pacific Ocean.
The Hawaii Wildlife Fund (“Fund”) challenged the County’s position through a citizen suit. The District Court agreed with the Fund, finding that the County’s discharge required a permit because it was “functionally [a discharge] into navigable water.” Hawai’i Wildlife Fund v. Cty of Maui, 24 F. Supp. 3d 980, 998 (Haw. 2014). The Ninth Circuit upheld the District Court’s decision but adopted an arguably broader standard. It held that the discharge of pollutants from a point source requires a permit where 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.” Hawai’i Wildlife Fund v. Cty. of Maui, 886 F.3d 737, 749 (9th Cir. 2018).
On appeal, the Supreme Court, in a 6-3 decision, vacated and remanded the case to the Ninth Circuit, holding 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.” Slip Op. 15. In an opinion authored by Justice Breyer, and joined by Chief Justice Roberts and Associate Justices Ginsburg, Sotomayor, Kagan and Kavanaugh, the Court stated that “this phrase best captures, in broad terms, those circumstances in which Congress intended to require a federal permit.” Id. Associate Justice Kavanaugh filed a concurring opinion, and Associate Justices Alito and Thomas filed dissents (Associate Justice Gorsuch joined Thomas’ dissent).
Part of the majority’s decision making appears to stem from their efforts to strike a middle ground among positions the justices viewed as too extreme. See id. The majority rejected the County’s and the Solicitor General’s theory that groundwater acts as an intermediary between a point source and a navigable water that precludes CWA applicability, based in part on its concern with potential gamesmanship under that rubric. Slip Op. 10, 15-16. Dischargers could escape CWA liability by moving a pipe back “perhaps only a few yards,” such that the discharge travelled through “at least some groundwater” before reaching a navigable water. Slip Op. at 10. The court also eschewed the County’s technical parsing of the statute, preferring an “every day meaning” of the term “from.” Slip Op. 10-11. And the Court rejected the Solicitor General’s invocation of an August 2019 EPA interpretive statement (Interpretive Statement on Application of the Clean Water Act National Pollutant Discharge Elimination System Program to Releases of Pollutants From a Point Source to Groundwater) that stated: “‘all releases of pollutants to groundwater’ are excluded from the scope of the permitting program, ‘even where pollutants are conveyed to jurisdictional surface waters via groundwater.’” Slip Op. at 12 (quoting 84 Fed. Reg. 16810, 16811). That interpretation would, in the eyes of the majority, “open a loophole allowing easy evasion of the statutory provision’s basic purposes,” which “is neither persuasive nor reasonable.” Slip Op. at 12.
The silver lining for the regulated community is that the Supreme Court did not adopt the far-reaching “fairly traceable” standard created by the Ninth Circuit. In the majority’s view, “Congress did not intend the point source-permitting requirement to provide EPA with such broad authority as the Ninth Circuit’s narrow focus on traceability would allow.” Slip Op. at 6. Further, the CWA’s structure indicates that Congress “intended to leave substantial responsibility and autonomy to the States” concerning groundwater pollution and non-point source pollution. Slip Op. at 6. The CWA’s history also strongly shows that CWA permitting does not extend so far as to allow general EPA permitting of groundwater. Slip Op. 7-8. And EPA’s “longstanding regulatory practice” shows that it has opposed CWA permitting for discharges that reach groundwater only after a lengthy period, contrary to the Ninth Circuit’s broad interpretation. Slip Op. 8-9.
Significantly, the County of Maui holding establishes a new CWA permitting test, which opens the door to a yet-to-be-determined amount regulation of discharges to groundwater. The case creates considerable uncertainty, especially concerning the facts required to demonstrate “functional equivalency.” While the majority enumerated factors “that may prove relevant” including “(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,” it acknowledged that future court decisions and even EPA administrative rulemaking would be necessary to fully flesh out how the “functional equivalent” test should be applied. Slip Op. at 16-17.
We anticipate the Supreme Court’s decision will create considerable uncertainty for both regulators and the regulated community for the foreseeable future. The Brownstein team will unpack and explore questions and implications raised by the decision in further publications over the next several days.