The Supreme Court further expanded the scope of permitting requirements for point source pollution under the Clean Water Act (“CWA”) in a case involving discharge liability to the County of Maui, Hawaii. The County operated four water treatment wells at the Lahaina Wastewater Reclamation Facility and used the wells as groundwater injection locations for treated effluent wastewater. The County operates all four wells at a treatment rate of 2 to 5 million gallons of treated effluent wastewater per day. The County admitted that at least two of its injection wells had a known release of treated effluent wastewater. The County further concurred that if the groundwater treatment wells were connected to a Water of the United States (“WOTUS”), a National Pollutant Discharge Elimination System (“NPDES”) permit would be required to discharge it into the ocean, because discharge of pollutants from one-point source into a navigable WOTUS requires a NPDES permit under the CWA. However, the County failed to obtain a NPDES permit for the four wells. In the County’s opinion, because the treated wastewater filtered through an alleged series of indirect channels and pathways before reaching the ocean, there would be no discharge liability under the CWA.

The U.S. District Court held that under the CWA the County: (1) indirectly discharged into the ocean through a groundwater conduit; (2) the groundwater is a point source under the CWA; and (3) the groundwater is a navigable water under the CWA. The Court of Appeal affirmed the District Court’s adoption of the plurality view of the “Waters of the United States” in Rapanos v. United States, 547 U.S. 715 (2006). Justice Scalia in Rapanos stated the CWA does not discern between direct and indirect point sources, and liability for both is clear under the statute. The justices of the Supreme Court unanimously affirmed Scalia’s interpretation of liability for both indirect and direct point sources.

In the case at issue, the Ninth Circuit held that the County may not build an ocean outfall for an indirect point source without obtaining a NPDES permit to avoid CWA liability. “The appeals court wrote that a permit is required when ‘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. County of Maui, 886 F.3d 737, 749 (2018) (emphasis added).

On February 19, 2019, the U.S. Supreme Court granted limited review of the case. The Court agreed only to hear the first cause of action: whether the County indirectly discharged into the ocean through a groundwater conduit. Oral argument took place on November 6, 2019, and the Court took arguments under submission. The Court considered competing arguments over whether the Ninth Circuit’s “fairly traceable” standard should apply before a point source reaches a navigable water or whether there is a “bright-line test” where one non-point source severs the continual connection to a navigable water. In a 6-3 opinion, the Court reasoned that a middle ground existed between the parties’ arguments. The statutory language allowed for a narrower interpretation than the Ninth Circuit’s ruling which is also significantly broader than “total exclusion of all discharges through groundwater.”

The opinion, written by Justice Breyer, likened the middle ground for regulating a discharge into groundwater that flows into a navigable water as a “functional equivalent of a direct discharge.” Under this reasoning, the Court held that a party who discharges pollutants into a groundwater table that directly flows into a navigable water needs to obtain a NPDES permit as outlined in the CWA. The Court’s expansion of the regulation of groundwater discharge was issued on the heels of the EPA’s finalized WOTUS rule which limited the definition of navigable waters to only surface waters and connected, free flowing streams, rivers, and tributaries that flow to the ocean. EPA clearly articulated its desire to exclude groundwater from the WOTUS rule. The County of Maui further argued this point to the Court to no avail. As the majority of the justices stated, allowing a limited scope for permitting discharge pollutants only connected by surface water would leave considerable backchannels for polluters to avoid liability not directly releasing into surface water. Justice Breyer left flexibility for the states to implement and regulate the issuance of permits under their authority.

As Justice Roberts articulated, the “functional equivalency” test requires further clarification to guide lower courts. As such, the Court remanded the case to the Ninth Circuit to further consider the parameters for a “functional equivalency” test and further executive branch rulemaking may follow. The Court’s decision upends the newly adopted WOTUS rule and definition, and now requires the Ninth Circuit to redefine the “functional equivalency” test to avoid a barrage of fact specific cases in the federal courts.

Diane Kindermann Henderson is a shareholder at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

 

Cty. of Maui v. Haw. Wildlife Fund_ 206 L. Ed. 2d 640