Supreme Court Applies Entirely New Test to Determine Clean Water Act Applicability in Highly Watched Case

How this Case Got to the Supreme Court

We first blogged about the County of Maui case more than two years ago when the Ninth Circuit applied a “fairly traceable” test to affirm a decision requiring a NPDES permit with respect to discharges of groundwater associated with four effluent disposal wells at a Hawaii wastewater disposal facility. Wastewater from those wells were found to migrate through groundwater to a point in the Pacific Ocean approximately a half-mile away within 84 days. After the County of Maui appealed this decision, the Supreme Court agreed to review it to evaluate whether the Ninth Circuit had used the appropriate standard to determine whether CWA applied.

The Majority Opinion’s Test

Although all justices on the Supreme Court found that the Ninth Circuit had applied an inappropriate standard, there were disagreements over what standard should apply. While not detailing all aspects of its test, the majority opinion authored by Justice Breyer, identified “some of the factors that may prove relevant” when discerning whether a particular groundwater discharge meets the new “functional equivalent” test: (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 noted that “[t]ime and distance will be the most important factors in most cases, but not necessarily every case.”

This approach is entirely new. Until now, various courts of appeals had used different approaches to assess CWA applicability: the Ninth Circuit evaluated whether groundwater discharges were “fairly traceable” to direct point source discharges; in Upstate Forever v. Kinder Morgan (which remains pending before the Supreme Court), the Fourth Circuit stated that an NPDES permit is needed for groundwater discharges involving a direct hydrological connection to a point source; and, in Kentucky Waterways Alliance v. Kentucky Util. Co., the Sixth Circuit found that an NPDES permit is never needed for groundwater discharges.

The “functional equivalent” created by the majority differs from all of these approaches. In the view of the majority, the Ninth Circuit’s “fairly traceable” test was too broad and the approaches taken by both the 6th Circuit and recent EPA guidance were too narrow. Using a test that is unduly narrow would – in the view of the majority – create a “loophole” in that a discharger could evade NPDES requirements by discharging to the ground rather than a waterbody:

[T]he statute 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. We think this phrase best captures, in broad terms, those circumstances in which Congress intended to require a federal permit. That is, an addition falls within the statutory requirement that it be “from any point source” when a point source directly deposits pollutants into navigable waters, or when the discharge reaches the same result through roughly similar means.

In rejecting the Ninth Circuit’s test, the Court made it clear that Congress refused legislative attempts to give the EPA general authority over groundwater and that “the structure of the [CWA] indicates that, as to groundwater pollution and nonpoint source pollution, Congress intended to leave substantial responsibility and autonomy to the States.”

What’s Next

The next steps for the County of Maui case will play out in a Hawaii district court. There, the district court will presumably consider whether groundwater flows associated with the county’s effluent disposal wells is the “functional equivalent” of a direct discharge from a point source.

Apparently wary that its decision may create some hardship, the majority suggests that uncertainty could be mitigated in part by the use of judicial discretion within penalty decisions of district court judges who determine that a given discharge is the “functional equivalent” of a direct point source discharge. “We expect that district judges will exercise their discretion mindful, as we are, of the complexities inherent to the context of indirect discharges through groundwater, so as to calibrate the Act’s penalties when, for example, a party could reasonably have thought that a permit was not required.”