On April 23, 2020, the Supreme Court ruled in County of Maui v. Hawaii Wildlife Fund that a federal permit is required under the Clean Water Act (CWA) when a discharge to groundwater is the “functional equivalent” of a discharge directly from a point source into navigable water. With this highly anticipated decision, the Court embraced a middle ground, maintaining the CWA’s underlying goal of regulating identifiable sources of pollutants entering navigable waters, but stopping short of requiring a permit for any release of pollutants that reaches navigable waters regardless of the time elapsed or the distance traveled.

The decision resolves a circuit conflict but, as the Court acknowledges, there is still work to be done by the lower courts, the Environmental Protection Agency (EPA), and the regulated community to define the contours of the new standard to determine whether, when, and where a permit is required.

Background

For decades, Maui County’s primary means of effluent disposal was pumping wastewater through four wells at its wastewater reclamation facility. The wastewater traveled about half a mile through groundwater to the Pacific Ocean. Environmental groups challenged the County’s practice under the citizen-suit provision of the CWA, alleging that the effluent that flowed to the ocean (a navigable water) through groundwater required a permit (called a National Pollution Discharge Elimination System, or NPDES, permit). The Ninth Circuit agreed, holding that a NPDES permit is required when “the pollutants are fairly traceable from the point source to a navigable water.” Hawai’i Wildlife Fund v. County of Maui, 886 F.3d 737, 749 (9th Cir. 2018) (emphasis added).

Circuit Conflict

The Ninth Circuit’s decision was the latest contribution to a circuit conflict on the question of whether discharges into groundwater that eventually reach a navigable water—the so-called “groundwater as conduit” theory—are subject to NPDES permits. Similar to the Ninth Circuit, the Fourth Circuit had held that a CWA permit is required whenever there is a “direct hydrological connection” between groundwater and navigable waters. Upstate Forever v. Kinder Morgan Energy Partners, L.P., 887 F.3d 637, 651 (4th Cir. 2018). The Sixth Circuit, by contrast, had concluded that NPDES permitting requirements do not apply to the discharge of pollutants into groundwater, even if that groundwater was hydrologically connected to surface water. Kentucky Waterways Alliance v. Kentucky Utilities Company, 905 F.3d 925, 932-938 (6th Cir. 2018). This circuit conflict, and the uncertainty it created for regulated entities, local governments, and other stakeholders, prompted the Supreme Court to address the issue.

The Maui Decision

In seeking reversal of the Ninth Circuit’s decision, the County argued that a permit is not required if the pollutant is delivered to a navigable water by any nonpoint source, such as rainwater runoff or groundwater. Slip op. at 4-5. The United States as amicus curiae agreed with the County as to groundwater, arguing that NPDES permitting requirements do not apply if a discharged pollutant travels through any amount of groundwater between emerging from a point source and reaching navigable waters. Slip op. at 10. The United States argued that this interpretation of the CWA is reflected in an Interpretive Statement issued by EPA in April 2019, which explained that “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 11-12. 

Environmental groups, meanwhile, defended the Ninth Circuit’s holding that a permit is required whenever a pollutant is “fairly traceable” to a point source, regardless of time and distance traveled through groundwater before reaching navigable waters. Slip op. at 4.

In a 6-3 decision, the Court rejected the parties’ positions as too extreme and inconsistent with the purposes of the CWA. Slip op. at 15. According to the Court, the Ninth Circuit’s “fairly traceable” standard could unreasonably expand the CWA’s jurisdictional reach to include discharges that take years to reach navigable waters, and only in a highly diluted form. Slip op. at 5. At the same time, the position of the County and the United States would create a “large and obvious loophole” in the statute. Slip op. at 10. The Court therefore held 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. at 11 (emphasis added). The Court remanded the case for the Ninth Circuit to apply the functional-equivalent test. 

“Functional-Equivalent” Test

Under the newly announced test, a discharge is “functionally equivalent” to a direct discharge if it “reaches the same results through roughly similar means.” Slip op. at 11. According to the Court, this test advances Congress’s goal of providing “federal regulation of identifiable sources of pollutants entering navigable waters without undermining the States’ longstanding regulatory authority over land and groundwater.” Slip op. at 15.

The Court acknowledged that its decision does not provide a bright line; the new test will need to be applied on a case-by-case basis to determine whether a permit is required. The Court did, however, articulate several factors to guide that determination. The two most important factors, the Court said, are the time and distance that pollutants travel between the point source and navigable water. Slip op. at 15-16. But other relevant factors include:

• the nature of the material through which the pollutant travels; 
• the extent to which the pollutant is diluted or chemically changed as it travels;
• the amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source; 
• the manner by or area in which the pollutant enters the navigable waters; and 
• the degree to which the pollution (at that point) has maintained its specific identity.

Slip op. at 16. 

Implications

In resolving the circuit conflict, Maui provides a uniform standard, while also superseding the EPA’s Interpretative Statement. But the Supreme Court’s announced standard is highly imprecise. Going forward, the key question in determining whether a NPDES permit is required will be whether a discharge is the “functional equivalent” of a direct discharge from a point source to a navigable water. As the Court acknowledged, this will require guidance from courts, through fact-specific decisions in individual cases, and from EPA, through administrative guidance and permitting decisions. Slip op. at 17. Entities currently discharging pollutants into groundwater (or planning to do so) will need to consider time, distance, and the other factors enumerated by the Court in Maui—as elaborated by future court decisions in the jurisdictions where they operate as well as revised EPA guidance—when considering whether such discharges require NPDES permits. So, while the Supreme Court’s decision has supplied a uniform standard, the imprecision of that standard likely portends uncertainty for some time.