Supreme Court’s New ‘Functional Equivalent’ Standard Creates Uncertainty in Clean Water Act Permitting of Discharges to Groundwater

On Thursday, April 23, 2020, the U.S. Supreme Court decided County of Maui v. Hawaii Wildlife Fund, No. 18-260, and held that the permit requirements of the Clean Water Act may now apply to a point source discharge to groundwater. In explaining when that might occur, the Court essentially said: it depends. This lack of clarity is likely to prove unhelpful to both the regulator and the regulated community in determining whether a permit is needed for such a discharge.

Under the Maui majority decision, the Act’s permitting requirements now apply when 1) there is a direct discharge from a point source into navigable waters or 2) there is a “functional equivalent of a direct discharge.” The 6-3 majority acknowledged that its new test presents more difficulties in application than the more absolute standards proposed by the parties. However, the Court supported its intermediate approach on grounds that the test:

1. Avoids both permitting loopholes and potentially overinclusive permitting.
2. Recognizes States’ authority to regulate groundwater and non-point source pollution.
3. Aligns with the Act’s legislative history.

This case stemmed from a 2012 Clean Water Act citizens’ suit claiming that the County of Maui needed an NPDES permit for its wastewater reclamation facility. Each day, the County’s facility pumps about four million gallons of effluent into deep injection wells, which then travels about a half mile through groundwater, to the ocean. The District Court granted summary judgment in favor of the environmental groups, and the 9th Circuit affirmed, stating that the discharge was “fairly traceable” from a point source to navigable waters. 886 F.3d 737, 749 (2018). The Supreme Court granted certiorari to resolve conflicting standards between circuits.

Dissents by Justice Thomas (joined by Justice Gorsuch) and by Justice Alito both reasoned that only a “direct” discharge from a point source to navigable waters should be subject to the Act’s permitting requirements. Justice Alito’s dissent resonates with many in the business and legal communities who fear an inexact standard may lead to inconsistent permitting decisions and significant uncertainty over when to seek a permit. However, the majority’s middle ground approach does recognize that permitting decisions are sometimes unique and individualized. While the new test may provide flexibility to accomplish the purposes of the Act, that flexibility comes with a price.

The majority provided a list of seven factors to consider when applying the new “functional equivalent” test. While the list is not exhaustive, the majority did prioritize time and distance as the two most influential factors in this analysis. The majority’s seven factors are as follows:

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.
6. The degree to which the pollution (at that point) has maintained its specific identity.

The Court did not decide whether the County’s use of injection wells was the functional equivalent of a direct discharge, but instead remanded the case.

Only time will tell what impact this decision will have on permitting across the country, but guidance documents interpreting the new standard are expected at both the state and federal levels. If you have questions about whether a permit is now required at your facility, we are eager to assist.