April 24, 2020

Is a NPDES Permit Needed for Groundwater Discharge? It Depends

Holland & Knight Energy and Natural Resources Blog
Dianne R. Phillips | Deborah E. Barnard | Jessica Ragosta Early
Energy and Natural Resources Blog

On April 23, the U.S. Supreme Court finally answered the question that has plagued environmental attorneys for years with its decision in County of Maui v. Hawaii Wildlife Fund (Slip Op 18-260, April 23, 2020): whether point source discharges of pollutants to groundwater with a hydrologic connection to navigable waters are or should be regulated under the Clean Water Act's (CWA) National Pollutant Discharge Elimination System (NPDES) program. This issue has been debated since before the County of Maui, Hawaii, filed its cert. petition on Aug. 27, 2018, seeking to overturn the U.S. Court of Appeals for the Ninth Circuit's decision in Hawaii Wildlife Fund v. County of Maui, 886 F.3d 737 (9th Cir. 2018). That decision held that a point source discharge into groundwater that ultimately flows into navigable waters should be regulated under the NPDES program, creating a split with the U.S. Court of Appeals for the Fourth Circuit's contrary decision in Upstate Forever v. Kinder Morgan Energy Partners, 887 F.3d 637 (4th Cir. 2018), for which a cert. petition was filed only a day later.

The U.S. Supreme Court's answer to this much-debated question was essentially, "it depends." It depends on whether the discharge from the point source to groundwater that reaches navigable waters is the "functional equivalent of a direct discharge from the point source into navigable waters" (slip op. at 1). In so holding, the Court rejected the positions put forth by both petitioner Maui – and supported by the U.S. Environmental Protection Agency (EPA) – and the respondent environmental groups (advocating for the Ninth Circuit decision).

Maui argued that releases of pollutants to groundwater are categorically excluded from the CWA's permitting requirements because Congress explicitly left regulation of discharges to groundwater to the states and EPA under other statutory authorities. The Court, however, did not find this interpretation persuasive because it would "open a loophole allowing easy evasion of the statutory provision's basic purposes" (slip. op. at 12). Likewise, the Court did not find supportable the Ninth Circuit decision advocated by the respondent environmental groups, which sought to impose a permitting requirement "so long as the pollutant is 'fairly traceable' to a point source even if it traveled long and far (through groundwater) before it reached navigable waters" (slip. op. at 4). Rather, the Court held "that the statute requires a permit when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge," finding "this phrase best captures, in broad terms, those circumstances in which Congress intended to require a federal permit" (slip. op. at 15, emphasis in original).

The Court went on to acknowledge the challenges for potential permittees and their counsel as follows:

The difficulty with this approach, we recognize, is that it does not, on its own, clearly explain how to deal with middle instances. But there are too many potentially relevant factors applicable to factually different cases for this Court now to use more specific language. Consider, for example, just some of the factors that may prove relevant (depending upon the circumstances of a particular case): (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, (7) the degree to which the pollution (at that point) has maintained its specific identity. Time and distance will be the most important factors in most cases, but not necessarily every case. (slip op. at 16)

Absent further guidance from EPA or state permit issuers, potential dischargers are left to navigate themselves through the sea of uncertainty created by the Court's decision. Given this uncertainty and the CWA's citizen suit provisions, those who fail to obtain an NPDES permit for potentially covered groundwater discharges, or at least disclose them during the permitting process, may leave themselves exposed to significant risk. Rather than stem the tide of litigation on this issue, the Court's decision may have opened the flood gates.

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