In light of its recent decision in County of Maui v. Hawaii Wildlife Fund, the Supreme Court of the United States has instructed the United States Court of Appeals for the Fourth Circuit to revisit its decision in Upstate Forever v. Kinder Morgan Energy Partners, L.P. On remand, the Fourth Circuit will be the first lower court to apply the Supreme Court’s new “functional equivalent” standard to determine 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. Under this “functional equivalent” standard, courts must consider a variety of factors to determine whether a release constitutes a “discharge of any pollutant” as defined by the CWA, including: (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, (4) the manner by or area in which the pollutant enters the navigable waters, and (5) the degree to which the pollution (at that point) has maintained its specific identity. As we discussed in detail on a previous post, it is unclear how lower courts will apply these subjective factors, and notably this initial case will be applying the standard specifically in the context of pipelines.

In Upstate Forever, two conservation groups brought suit alleging that a pipeline operator violated the CWA after a pipeline rupture caused gasoline to seep into nearby waterways through groundwater. The plaintiffs alleged that the leak constituted an unpermitted discharge into navigable water. The district court dismissed the claim finding that the plaintiffs had failed to establish an ongoing violation of the CWA or that the CWA applied to pollutants that moved through groundwater before entering navigable waters. On review, the Fourth Circuit considered whether (1) the plaintiffs had properly alleged an ongoing violation of the CWA, even though the ruptured pipeline was repaired, and (2) there was a sufficient nexus between the source of the pollution and navigable waters to state a claim based on an unpermitted discharge of a pollutant as defined by the CWA.

In its decision, the Fourth Circuit held that the plaintiffs had sufficiently alleged that there was an ongoing violation of the CWA. Although the pipeline had been repaired, the court noted that pollutants continued to migrate and be added to nearby waterways through groundwater. Additionally, the court held that the plaintiffs had sufficiently alleged that the gasoline constituted a discharge of a pollutant under the CWA. The court found that the indirect discharge of gasoline through groundwater had a “direct hydrological connection” to navigable waters that could support a theory of liability under the CWA.

Now, the Fourth Circuit will be required to revisit its earlier decision in light of the Supreme Court’s new “functional equivalent” standard set forth in County of Maui. The Upstate Forever case is particularly significant because the Fourth Circuit’s application of the relatively undefined “functional equivalent” standard will create important precedent as to how the Supreme Court’s new standard will be interpreted, and how it will be applied to pipelines specifically. This precedent could impact how pipeline operators manage impacts from or related to pipeline construction projects, ongoing maintenance, and releases.

We will continue to provide updates on the Fourth Circuit’s treatment of the “functional equivalent” test in Upstate Forever and how that court’s application of the standard may impact pipeline operators.

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Photo of Catherine D. Little Catherine D. Little

Catherine Little has been advising oil and gas pipelines, terminals and LNG facilities on energy and environmental administrative law for over 25 years at all levels of federal, state and local government, with particular emphasis on regulatory compliance, litigation and enforcement defense and…

Catherine Little has been advising oil and gas pipelines, terminals and LNG facilities on energy and environmental administrative law for over 25 years at all levels of federal, state and local government, with particular emphasis on regulatory compliance, litigation and enforcement defense and administrative adjudication under the Pipeline Safety Act, Natural Gas Act, Clean Water Act (including wetlands), Oil Pollution Act and National Environmental Policy Act. Her team has sought appellate review for enforcement matters with favorable results and works closely with industry and regulators alike to obtain favorable results for their clients. Catherine also regularly counsels clients with respect to pipeline construction and design issues, permitting, confidential investigations, spill and release reporting and response.

Photo of Annie M. Cook Annie M. Cook

Annie Cook’s practice focuses on administrative, environmental, and oil and gas transportation laws. Annie counsels clients on regulatory issues, compliance and litigation strategy, construction and siting, and permitting and enforcement defense relating to the Pipeline Safety Act, the Natural Gas Act, the Clean…

Annie Cook’s practice focuses on administrative, environmental, and oil and gas transportation laws. Annie counsels clients on regulatory issues, compliance and litigation strategy, construction and siting, and permitting and enforcement defense relating to the Pipeline Safety Act, the Natural Gas Act, the Clean Water Act, the Oil Pollution Act, National Environment Policy Act, TCSA, and related state and local laws.  Her team also represents clients regarding related transportation security issues and in responding to inquiries and investigations from the Department of Transportation’s Office of Inspector General.. Annie’s clients include owners and operators of oil and natural gas pipeline and related storage, terminal, and LNG facilities as well as other energy industry stakeholders.