How EPA's Proposed Discharges of Pollutants Rule Could Provide Clarity on Discharge Permits

Are pollutant discharges into groundwater that have a hydrologic connection to a water of the United States subject to Clean Water Act (CWA) regulation? For entities needing National Pollutant Discharge Elimination System (NPDES) permits, a proposed Environmental Protection Agency (EPA) rulemaking could provide clarity on this issue, which has faced broadening interpretation and a circuit split in the courts. Faegre Baker Daniels partner Chris Dolan moderated a panel that examined the EPA request for comment during the firm’s 2018 Food & Agribusiness National Conference.

EPA’s Proposal

EPA has solicited comments on the proposed rule regarding Clean Water Act Coverage of “Discharges of Pollutants” via a Direct Hydrologic Connection to Surface Water, with the request appearing in the Federal Register on February 20, 2018. The comment period closed on May 21, 2018.

In its Request for Comment, the EPA sought feedback on several issues, including:

• Whether EPA “should review and revise its previous statements concerning the applicability of the CWA NPDES permit program” to these types of discharges.
• Whether “subjecting such releases to CWA permitting is consistent with the text, structure, and purposes of the CWA.”
• Whether EPA should regulate via NPDES permitting or other CWA provisions.
• Whether the states are overseeing these releases.
• Which “format or process the EPA should use to revise or clarify its previous statements” if the Agency decides to pursue further action.

The Circuit Split

The EPA cited conflicting regulatory statements and legal precedents as one of the reasons for its proposed rulemaking notice. Two recent U.S. Court of Appeals decisions have broadened the reach of the CWA in those jurisdictions and contributed to a circuit split.

In Hawai’i Wildlife Fund v. County of Maui, the defendant county was discharging approximately 3 to 5 million gallons of treated wastewater each day into underground injection wells that flowed into ground water, and eventually, the Pacific Ocean. Op. at 5. The county did not have an NPDES permit for the discharges, and the state agency responsible for administering NPDES permits was still investigating whether the county needed one. Op. at 24-25. In February 2018, the Ninth Circuit found that a point source discharge to groundwater of “more than [a] de minimis” amount of pollutants that is “fairly traceable from the point source… such that the discharge is the functional equivalent of a discharge into a navigable water” is regulated under the Clean Water Act. Op. at 19.

In Upstate Forever v. Kinder Morgan Energy Partners, it was less clear whether residual discharge from an oil spill ultimately flowed into a nearby stream. See Op. at 24. But in April 2018 the Fourth Circuit similarly found that “[P]laintiff must allege a direct hydrological connection between ground water and navigable waters in order to state a claim under the CWA for a discharge of a pollutant that passes through ground water.” Id.

In its notice, the EPA cited seemingly conflicting precedent concluding that “a hydrological connection between groundwater and surface waters is insufficient to justify CWA regulation.” See Village of Oconomowoc Lake v. Dayton Hudson Corporation, 4 F.3d 962, 965 (7th Cir. 1994), cert. denied, 513 U.S. 930 (1994); Rice v. Harken Exploration Co., 250 F.3d 264, 272 (5th Cir. 2001).

Current Status

The proposed EPA rule seeks to bring clarity and certainty to NPDES permitting. The EPA may also be indicating to the U.S. Supreme Court through this rulemaking notice that this is a technical, factual issue more appropriate for the EPA to resolve than for the courts. But until there is a new rule or the Supreme Court takes up the question, businesses in the Fourth and Ninth Circuits are subject to the CWA’s newly expanded reach.