SCOTUS Establishes New “Functional Equivalent” Standard for Clean Water Act

SCOTUS Establishes New “Functional Equivalent” Standard for Clean Water Act

By a vote of 6-3, the Supreme Court held in County of Maui, Hawaii v. Hawaii Wildlife Fund et al. that permits are required under the Clean Water Act (CWA) when there’s a “functional equivalent of a direct discharge.” In so ruling, the Court rejected the narrow interpretation of the CWA advanced by the Trump Administration, as well as the expansive test employed by the Ninth Circuit Court of Appeals.

Competing Interpretations of CWA

The CWA prohibits the discharge of any pollutants, including dredged or fill material, to “navigable waters” without first obtaining a permit under the National Pollutant Discharge Elimination System (NPDES). Prior to the Court’s recent decision, the federal courts of appeals are deeply divided on the question of whether a CWA “discharge of a pollutant” occurs when pollutants are released from a point source to groundwater and migrate through or are conveyed by, groundwater to navigable waters.

In County of Maui, the Ninth Circuit Court of Appeals held that the CWA does not require that the point source itself convey the pollutants directly into the navigable water. According to the Ninth Circuit, the County of Maui was liable under the CWA because (1) the County discharged pollutants from a point source; (2) the pollutants were fairly traceable from the point source to a navigable water such that the discharge was the functional equivalent of a discharge into the navigable water; and (3) the pollutants reached navigable waters at greater than de minimis levels.

The Ninth Circuit’s decision is at odds with the Sixth Circuit, as well as the interpretation adopted by the Environmental Protection Agency (EPA) under President Donald Trump.  According to EPA guidance issued last year, discharges of pollutants to groundwater are “categorically excluded” from the CWA’s permitting requirements.

Supreme Court’s New “Functional Equivalent” Test

Ultimately, the Supreme Court devised its own CWA test. “We hold that the 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,” Justice Stephen Breyer wrote on behalf of the court.

The Court rejected the Ninth Circuit’s “fairly traceable” standard as overly broad, concluding that Congress did not intend to provide EPA with such broad authority. The Ninth Circuit’s approach test “would require a permit in surprising, even bizarre, circumstances, such as for pollutants carried to navigable waters on a bird’s feathers, or, to mention more mundane instances, the 100-year migration of pollutants through 250 miles of groundwater to a river,” Justice Breyer wrote. “Virtually all water, polluted or not, eventually makes its way to navigable water,” he added.

The Supreme Court concluded that the approach advocated by Maui County and the EPA was equally extreme. “We do not see how Congress could have intended to create such a large and obvious loophole in one of the key regulatory innovations of the Clean Water Act,” Justice Breyer wrote. “Why could not the pipe’s owner, seeking to avoid the permit requirement, simply move the pipe back, perhaps only a few yards, so that the pollution must travel through at least some groundwater before reaching the sea?” he asked.

The Supreme Court’s “functional equivalent of a direct discharge” standard will require a permit for discharge from any point source directly into navigable waters, and from point sources when the discharge “reaches the same result through roughly similar means.”  The Court noted that time and distance will be the most important factors in most cases, but listed seven factors that should be considered in determining whether the discharge comes “from” a point source: (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.

Justice Breyer provided the following example of how the factors might be applied: “If the pipe ends 50 miles from navigable waters and the pipe emits pollutants that travel with groundwater, mix with much other material, and end up in navigable waters only many years later, the permitting requirements likely do not apply.”

Justices Samuel Alito, Neil Gorsuch and Clarence Thomas dissented. “Based on the statutory text and structure, I would hold that a permit is required only when a point source discharges pollutants directly into navigable waters,” Justice Thomas wrote.

Key Takeaway

The Supreme Court’s decision brings much-needed clarity to CWA liability. By striking a middle ground, some, but not all, groundwater discharges will require a permit. Going forward, the EPA and the courts will likely refine the Court’s test further via court decisions and administrative guidance.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.