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.