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County of Maui v. Hawaii Wildlife Fund: Groundwater Discharges May Require Permit Under Clean Water Act

April 28, 2020

Overview

On April 23, the United States Supreme Court held that discharges to groundwater may require a permit under the Clean Water Act if they are the “functional equivalent” of discharges directly to navigable waters. This ruling establishes that systems that control process water and storm water through seepage into groundwater could be required to have a permit or be subject to suit.

The Federal Water Pollution Control Act Amendments of 1972 or Clean Water Act (“CWA” or “Act”) prohibits the “discharge of pollutants” into “navigable waters” without a valid National Pollutant Discharge Elimination System (“NPDES”) permit. The Act defines “discharge of a pollutant” as “any addition of any pollutant to navigable waters from any point source.” The Act defines “navigable waters” simply as “waters of the United States” (i.e., “jurisdictional waters”) but offers little guidance as to what “waters of the United States” actually means. As a result, whether the CWA applies to a given water body has long been the subject of controversy and confusion.

In County of Maui v. Hawaii Wildlife Fund, the Supreme Court spelled out—albeit with substantial ambiguity—the circumstances under which the CWA can be used to regulate pollution that is discharged to groundwater from a point source. The Court held that the CWA requires a federal permit where a discharge to groundwater is the “functional equivalent” of a discharge from a point source directly into a navigable water. For the regulated community, this decision is confounding: while it walks back the Ninth Circuit’s holding that virtually all groundwater discharges could be subject to regulation under the CWA, it conflicts with the EPA’s determination that the CWA does not regulate discharges to groundwater, as spelled out most recently in the new Waters of the United States (“WOTUS”) rule, published on April 21, 2020, only two days before the Supreme Court issued the slip opinion in County of Maui, and effective June 22, 2020. And the standard the County of Maui case imposes—functional equivalence—is murky at best, requiring significant factual analysis and likely clarification in future appellate decisions. Only one thing is clear after the Court’s most recent CWA decision: folks with operations that result in point source discharges to groundwater should carefully evaluate whether the CWA applies.

Prior to the County of Maui case, federal courts were divided as to whether the CWA applies to pollutants that are discharged into groundwater and subsequently migrate into surface water bodies. District courts in the Ninth Circuit had consistently held that discharges into groundwater with a direct, hydrological connection to jurisdictional waters—i.e., groundwater that serves as a conduit through which pollutants travel to navigable waters—are subject to regulation. But a number of courts in other circuits had concluded that groundwater discharges are outside the CWA’s regulatory jurisdiction. In an attempt to provide direction and clarity, EPA issued an interpretative statement in 2019 that “waters of the United States” do not include groundwater, and had intended to solidify that interpretation in the new WOTUS rule. By holding that the CWA does regulate point source discharges into groundwater when those discharges are the functional equivalent of a direct discharge to navigable waters, the Supreme Court rejects the EPA’s interpretation: “We do not defer here to EPA’s interpretation of the statute … to follow EPA’s reading would open a loophole allowing easy evasion of the statutory provision’s basic purposes. Such an interpretation is neither persuasive nor reasonable.” In confronting the EPA interpretation, the Opinion of the Court conflicts with the recently issued WOTUS rule.

The County of Maui case involved effluent discharges from injection wells at a wastewater reclamation facility run by the County of Maui in Hawaii. In 2012, several environmental groups brought suit against the county under the CWA, claiming that those groundwater discharges required an NPDES permit because they were ultimately discharging to the Pacific Ocean (a navigable water). To prove the hydraulic connection between the groundwater and the ocean, the environmental groups relied on a tracer dye study, which indicated that 64% of the contaminated water pumped into the injection wells made its way to the Pacific Ocean within about 84 days after being placed into the wells. Relying in part on that study, the United States District Court for the District of Hawaii held that because the “path to the ocean is clearly ascertainable,” the discharge from the injection wells into the nearby groundwater was “functionally one into navigable water” and thus required an NPDES permit.

The Ninth Circuit affirmed, but it also expanded the statutory standard, holding that a permit is required whenever “the pollutants are fairly traceable from the point source to a navigable water.” The Ninth Circuit left for “another day the task of determining when, if ever, the connection between a point source and a navigable water is too tenuous to support liability ….”

In its review of the Ninth Circuit’s decision, the Supreme Court confirmed that groundwater can be subject to regulation under the CWA, but in a narrower class of cases than identified by the Ninth Circuit. The Supreme Court rejected the Ninth Circuit’s “fairly traceable” approach as too broad, but it also expressly invalidated EPA’s interpretation that groundwater is never subject to regulation as inconsistent with the purpose of the Act. (“We do not defer here to EPA’s interpretation of the statute … to follow EPA’s reading would open a loophole allowing easy evasion of the statutory provision’s basic purposes. Such an interpretation is neither persuasive nor reasonable.”)

Ultimately, the Court held that a discharge from a point source directly into navigable waters is not the sole test: “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.” That is, a discharge falls within the CWA’s regulatory jurisdiction “when a point source directly deposits pollutants into navigable waters, or when the discharge reaches the same result through roughly similar means.”

Recognizing that “there are too many potentially relevant factors” that could be determinative of whether a particular groundwater discharge is the “functional equivalent” of a direct discharge to navigable waters, the Court articulated a number of them, 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, (7) the degree to which the pollution (at that point) has maintained its specific identity.” The Court explained that time and distance will usually be the most important factors, but also cautioned that the standard depends heavily on the facts of a given case, and additional factors may be relevant to the analysis. The Supreme Court also anticipated that subsequent decisions by district and appellate courts, as well as administrative permitting decisions and rulemakings, will, over time, give more substance to the functional equivalence standard it articulated in County of Maui.

In the wake of the County of Maui decision, regulated parties are left to determine whether their own groundwater discharges are “the functional equivalent” of a direct discharge from the point source into navigable waters. If so, an NPDES permit will be required. The Court has provided some guidance as to how that standard should be applied, but it is admittedly a fact intensive assessment, open to a great deal of interpretation. In light of this decision, facilities with retention ponds, underground injection systems, and other process water and storm water systems that rely on drainage into the subsurface should review their systems and the local hydrology with counsel to determine the potential application of the CWA.

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