U.S. Supreme Court Reaches Decision on NPDES Permitting in Maui Case

by Nathan E. Vassar

It isn’t often that the U.S. Supreme Court addresses water quality permitting, but earlier this spring the High Court issued a ruling on the heavily followed case, County of Maui v. Hawaii Wildlife Fund, et al. The ruling effectively extends the scope of the NPDES program (most often delegated to state environmental agencies as is the case in Texas) and creates a new seven-factor test to determine when a discharge permit is needed.

In a 6-3 decision, the Court overruled the 9th Circuit’s test of “fairly traceable,” (which effectively asked if one can connect-the-dots between a discharge and its ultimate reach to a jurisdictional water body) but also poured out the County of Maui argument that was tied to the intervening groundwater in place (thus, not a “point source” discharge to waters of the United States, but to exempted groundwater). Instead, the Court created a “direct discharge or functional equivalent of a direct discharge” test, as further described below.

The test makes clear that the “conduit theory” of discharge permitting is alive and well, and neither the groundwater exemption to jurisdictional waters nor 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 an 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 new seven “functional equivalent” factors established by the Court to be considered in determining the need for a discharge permit:

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 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 in check over time, and the judicial branch can address any overreach on NPDES permitting at the penalty phase upon expansive enforcement. In addition, Justice 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 significantly 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.

Nathan Vassar is a Principal in the Firm’s Water Practice Group. Nathan assists communities and utilities with environmental permitting and enforcement matters with both state and federal regulators, with a focus on water quality-related enforcement. His involvement includes negotiating settlement terms and counseling clients with respect to compliance strategies. If you would like additional information or have questions related to this article or other matters, please contact Nathan at 512.322.5867 or nvassar@lglawfirm.com.