The U.S. Supreme Court issued its long-awaited opinion in County of Maui v. Hawaii Wildlife Fund, addressing whether the Clean Water Act (CWA) requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, such as groundwater. In its decision, the Court established a new “functional equivalent” test with potential impacts to pipeline construction projects, ongoing maintenance, and possibly pipeline spills. The application of this new rule, however, is far from straightforward.
In a 6-3 split, with Justice Breyer delivering the opinion of the Court, the Court rejected the Ninth Circuit’s “fairly traceable” test for determining when discharges from point sources to groundwater that reach surface waters are subject to Clean Water Act (CWA) permitting. The Court instead laid out a narrower test focusing on whether a discharge to groundwater is the “functional equivalent of a direct discharge.” The CWA defines point sources as any “discrete conveyance . . . from which pollutants are or may be discharged,” including discharge pipes, channels, wells, and, at least in the view of some courts, ruptured underground pipelines.
The Court’s decision, and its new test, might also impact whether the Supreme Court will take up Upstate Forever v. Kinder Morgan Energy Partners, L.P., for which a petition is still pending as of the time of this post.
Functional Equivalent Factors to Be Considered
Rather than laying out a bright-line rule as to when a permit should be required as the parties had argued in the case, the Supreme Court articulated a number of factors that are relevant to making the determination on a case-by-case basis. Time and distance will be the most important factors, with the Court providing alternate examples of where permitting would and would not clearly apply. “Where a [discharge] pipe ends a few feet from navigable waters and the pipe emits pollutants that travel those few feet through groundwater (or over the beach), the permitting requirement clearly applies.” Conversely, “[i]f the [discharge] 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.”
To address cases that fall in between these two extremes, the Court also enumerated several additional factors. Pipeline operators may need to consider these factors when evaluating risks to existing or new projects, including hydrostatic test water discharges. The opinion states that “the nature of the material through which the pollutant travels and the extent to which the pollutant is diluted or chemically changed as it travels” may be relevant. Additional factors that may be relevant in specific instances include: (1) transit time, (2) distance traveled, (3) the amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source, (3) the manner by or area in which the pollutant enters the navigable waters, and (4) the degree to which the pollution (at that point) has maintained its specific identity. The Court also elaborated that federal permitting determinations pursuant to the functional equivalent test should preserve state authority to regulate groundwater and other nonpoint sources of pollution.
Maui Facts and Prior Ninth Circuit Holding
The Maui case focused on the County of Maui’s management of wastewater effluent from its wastewater treatment plant. The County would treat sewage and then inject it into wells for disposal. Subsequent tracer dye testing revealed that well discharges were reaching the Pacific Ocean in approximately 84 days through groundwater. In February 2018, the Ninth Circuit issued its opinion laying out a “fairly traceable” standard to determine whether a discharge was “fairly traceable from the point source to a navigable water.” Hawai’i Wildlife Fund v. Cty. of Maui, 886 F.3d 737, 749 (9th Cir. 2018). The Ninth Circuit found that the tracer dye study and the County’s concessions proved that the “fairly traceable” standard was met. The County filed a petition for certiorari with the U.S. Supreme Court, which the Court granted in February 2019, limited the case to “whether the CWA requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, such as groundwater.” The Court also deferred action in other appeals regarding the same issue.
In the opinion, the Supreme Court acknowledges the challenges of applying the “functional equivalent” test, especially in cases where time and distance are not determinative. The Court invites lower courts to provide guidance through decisions in individual cases, which is likely to open the flood gates to additional litigation on the issue. According to the Court, lower courts can also mitigate against any injustices associated with test’s implementation by exercising their discretion under the CWA to invoke lower penalties. At the same time, the Court states that EPA “can provide administrative guidance (within statutory bounds)” including through granting “individual permits, promulgation of general permits, or the development of general rules.”
Justice Kavanaugh joined the majority but filed a separate concurring opinion emphasizing the consistency of the Court’s opinion regarding pollution “from” point sources with the interpretation set forth in Justice Scalia’s plurality opinion in Rapanos v. United States, 547 U.S. 715 (2006). Justices Thomas (joined by Justice Gorsuch) and Alito filed dissenting opinions, criticizing the lack of clarity in the majority’s opinion. Justice Thomas would strictly adhere to the CWA’s text and would only require a permit when a point source discharges pollutants directly into navigable waters. Justice Alito’s dissent focuses on the lack of consistency which “invites arbitrary and inconsistent application.”
Although the Court’s opinion provides a general direction on a historically controversial issue, it will cause a significant degree of uncertainty for the foreseeable future. EPA may provide further clarity through guidance or a rulemaking, though such a rulemaking will likely be subject to additional legal challenges. In the meantime, we are likely to see a range of interpretations and applications of the Court’s factors across different EPA regions and states with lower courts subsequently applying varying weight to those factors and possibly adding others. In particular, this indicates that the Court may be unlikely to take up a case raising similar issues and arguments specific to pipeline discharges, Upstate Forever.
For additional information regarding the Supreme Court’s opinion, please contact the Troutman pipeline team.