Hardly Ever? Permitting of Indirect Discharges Under the Clean Water Act After County of Maui, Hawaii v. Hawaii Wildlife Fund

Alerts / May 6, 2020

The Supreme Court’s most recent voyage into Clean Water Act (CWA) jurisprudence came in County of Maui, Hawaii v. Hawaii Wildlife Fund, 590 U. S. ____ (2020) (Slip Op.), which concerned whether CWA permits are required in order to discharge any pollutant from a point source into groundwater, when the groundwater eventually carries the pollutant to navigable water. While the county and the Environmental Protection Agency (EPA) said “never” and the Ninth Circuit said “almost always,” the Court rejected both of these approaches. The test ultimately accepted by the Court is whether “the addition of the pollutants through groundwater is the functional equivalent of a direct discharge from the point source into navigable waters.” Slip Op. at 1. The question for industry going forward is, where does this “functional equivalence” test fall between the extremes of always and never? A close read of the opinion suggests that the Court’s answer may be “hardly ever.”

It could be argued that the Court’s opinion does nothing more than muddy the waters by creating more questions than it answers. After all, the Court identifies no fewer than seven factors relevant to whether a discharge is “functionally equivalent,” and even then says that those are “just some of the factors that may prove relevant.” See Slip Op. at 16. Furthermore, the Court declines to provide unconditional answers on even the most extreme fact patterns, noting for instance that “if the 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.” Slip Op. at 16 (emphasis added). But the astute navigator of the Court’s opinion need not infer ambivalence from restraint. There are reasons unrelated to the scope of the CWA that may have caused the majority’s hesitance to address hypothetical fact patterns, chiefly the multi-ideological coalition composing the majority, including Kavanaugh and Roberts (both notable for their preference for limiting holdings as narrowly as possible to the facts of the case before them).

Regardless of the intended scope, the Court’s rule is certain to engender more litigation to discover the contours of the new “functional equivalent” test – as does any rule that rejects the bright-line demarcations of “always” and “never.” But the Court provides ample reason to hope that the new functional equivalence test will be construed narrowly.

In passage after passage of the opinion, the Court found that the CWA, properly read, limits the permit obligation to a narrow class of point sources and defers to states to regulate nonpoint sources, including groundwater, with federal assistance generally limited to “studying the issue, sharing information with and collecting information from the States, and issuing monetary grants.” Slip Op. at 7. The Court opines, “[A]s to groundwater pollution and nonpoint source pollution, Congress intended to leave substantial responsibility and autonomy to the States.” Slip Op. at 6. The Court also rejects reliance on proximate cause in determining whether pollution was added to navigable waters “from” a point source, stating that requiring proximate causation would not sufficiently limit permitting requirements to circumstances functionally equivalent to direct discharges. These portions of the opinion seem most consistent with a narrow reading of the functional equivalence test.

So how will the test work in practice? The Court identifies seven factors relevant to determining whether a discharge is “functionally equivalent” to a direct discharge: (1) transit time, (2) distance traveled, (3) the nature of the material through which the pollutant travels, (4) the extent to which the pollutant is diluted or chemically changed as it travels, (5) the amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source, (6) the manner by or area in which the pollutant enters the navigable waters and (7) the degree to which the pollution (at that point) has maintained its specific identity. The Court says, “Time and distance will be the most important factors in most cases, but not necessarily every case.” Slip Op. at 16. Kavanaugh’s concurrence further emphasizes that the test will be guided primarily by the time and distance factors. Slip Op. at 2-3 (Kavanaugh, J., concurring).

The Court’s driving concern appears to be the need to encompass scenarios that are essentially direct discharges to navigable waters, but which would not be captured by strictly limiting permits to additions directly from a point source. It is impossible to read the Court’s opinion without feeling the Court’s frustration with attempts to impose or evade permit requirements by a technicality. The Court as good as says that permits will be required for functionally equivalent cases in addition to direct discharge cases to prevent a bad faith actor from deciding to “simply move [a] pipe back, perhaps only a few yards, so that the pollution must travel through at least some groundwater before reaching the sea” or to set up “a pipe that drains onto the beach next to navigable waters, even if the pollutants then flow to those waters.” Slip Op. at 14-15. Accordingly, the Court appears to envision a two-step analysis that first inquires whether there is a discharge directly into navigable waters. If the answer is no, the Court may then inquire whether the discharge looks like a direct discharge but is not, due to some technicality. As the Court explains, “an addition falls within the statutory requirement that it be ‘from any point source’ when a point source directly deposits pollutants into navigable waters, or when the discharge reaches the same result through roughly similar means.” Slip Op. at 15. Accordingly, an important key to proving that a discharge is not functionally equivalent to a direct discharge will likely be to show that the quantity of the distinction relied on (be it distance, time, etc.) is one that actually makes some material difference (e.g., in terms of the concentration, rate, traceability, or composition of the discharge from the point source).

Notably, the Supreme Court did not limit the new functional equivalence test to the case-specific context of discharges through groundwater. Instead, the Court treated groundwater as a means of conveyance from the point source to navigable waters, expressly analogizing to aboveground conveyances. For instance, the Court notes that “[w]here a 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.” Slip Op. 15-16 (emphasis added). Thus, it appears that the Court’s new functional equivalence test also applies to a discharge aboveground that is not directly deposited into navigable water. Previous lower court decisions in this context turned on whether a discharge “naturally washes downstream” to navigable waters. See Rapanos v. United States, 547 U. S. 715, 743 (2006) (Scalia, J., plurality opinion). Although the precise effect of displacing this inquiry with the functional equivalence test will undoubtedly be hashed out in future litigation, the functional equivalence test seems more limited. After all, an inquiry into the foreseeability that the discharge will naturally wash into navigable waters turns on similar concepts to those underlying proximate causation, which the Court expressly rejected as insufficiently narrow.

Of comfort to those struggling with any uncertainty under the Court’s new test, the Court stressed (and all but directed) that penalties should not be imposed if a good faith decision not to get a permit turns out to be wrong. See Slip Op. at 18. Accordingly, properly documenting decisions not to get permits under the new test may be of particular importance going forward. Of course, given the conservatism of many local Army Corps and state agency permitting authorities, anyone who attempts to test the waters by failing to permit a debatable case could become a test case for how the courts will apply the functional equivalence test in practice.

Authorship Credit: Martin Booher, Joshua Wilson and Robert Cheren

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