Supreme Court Issues Opinion regarding Discharge Permitting Scope

The U.S. Supreme Court creates new test in discharge permitting under Maui case, potentially impacting well-injection practices nationwide.

• The Court overruled the 9th Circuit’s test of “fairly traceable,” but also poured out the Maui argument that contended no discharge permit was required. Instead, the Court created a “direct discharge or functional equivalent of a direct discharge” test, as further described below.

• The conduit theory of discharge permitting is alive and well, and neither (1) the groundwater exemption to jurisdictional waters; nor (2) the existence of the UIC regulatory program are sufficient to stop NPDES coverage if there is a “functional equivalent” to a point-source discharge. An intermittent stop (or step, such as groundwater) in the transit from an outfall/point source to jurisdictional waters doesn’t mean that the chain is broken and a NPDES permit is unnecessary – rather, the new test of “functional equivalent” of a direct discharge asks how similar an actual discharge is to that of a non-disputable direct discharge (looking at both time and distance as effluent migrates to jurisdictional waters, as well as the “material through which the pollutant travels”, the extent of dilution, among other factors). Below are the seven “functional equivalent” factors to consider:

1. Time (most important, along with distance, in most cases);
2. Distance (most important, along with time, in most cases);
3. Nature of the material through which the pollutant travels;
4. Extent to which the pollutant is diluted or chemically changed as it travels;
5. Amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source;
6. Manner by or area in which the pollutant enters the navigable waters; and
7. Degree to which the pollution (at that point) has maintained its specific identity.

• The Court noted the proven migration (by dye testing) of about half a mile’s distance that Maui’s effluent travels through groundwater before it reaches the Pacific Ocean.

• The Opinion analyzed the meaning of the word “from” (“from a point source”) and concluded that Congress did not intend a “fairly traceable” standard as the 9th Circuit broadly stated, but it also isn’t as bright-line a rule as Maui argued (Maui’s position was that the intervening groundwater between Maui’s discharge and the Pacific Ocean meant no discharge permit because the “discharge” was “from” the groundwater, an intervening medium between Maui’s infrastructure and the Pacific Ocean). Breyer’s Opinion noted the reality that a 9th Circuit standard (the “fairly traceable” approach) could have the result of NPDES permitting on discharges that take years to reach navigable waters (“[t]o interpret the word ‘from’ in this literal way [referring to the 9th Circuit 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.”).

• As for the application, although Justice Alito’s dissenting opinion argues that the new test will lead to arbitrary and inconsistent application, the majority opinion addresses this by stating that EPA has managed to keep its NPDES program (which is delegated to the states with a couple exceptions) in check over time, and the judicial branch can address any overreach on NPDES permitting at the penalty phase upon expansive enforcement.

• Alito’s dissent may also strike a chord with some in the wastewater industry (as well as many with UIC authorizations) as he states, “Entities like water treatment authorities that need to know whether they must get a permit are left to guess how this nebulous standard will be applied. Regulators are given the discretion, at least in the first instance, to make of this standard what they will.” As a practical matter, this may not impact Texas POTWs, but it could impact those operations that deep-well inject wastes, particularly if there is a known surface water-groundwater connection in the vicinity of the injections.