May 06, 2020


When you take that family dream vacation to Maui, the last thing you want to contemplate is the island’s treated municipal waste water. But the Supreme Court considered just that in its April 23 opinion. Well almost—it addressed whether how that treated effluent reached the ocean violated the Clean Water Act. I’ll offer big-picture takeaways from the opinion, and I’ll answer the question, what does all of this have to do with Little Timmy’s bath time?

But first, a quick overview. The CWA forbids “any addition” of any pollutant from “any point source” to “navigable waters” without an appropriate permit from the EPA. The issue here was whether the Act requires a permit when pollutants originate from a point source but are conveyed to navigable waters by groundwater.

The County of Maui pumped “treated sewage” into underground injection wells, which eventually migrated through groundwater into the ocean. Those actions apparently complied with state law and the federal Safe Drinking Water Act. The Court had to decide whether Maui also needed a CWA permit.

The six-Justice majority (Justice Breyer, plus Chief Justice Roberts and Justices Ginsburg, Sotomayor, Kagan, and Kavanaugh) believed it faced two extreme choices. The Ninth Circuit had held that a CWA permit is required whenever the pollutants are “fairly traceable” to a point source, no matter how much time and distance elapsed between the point source and the pollutants’ ultimate arrival in navigable waters. Maui and the Solicitor General, by contrast, argued that only direct additions of pollutants from point sources into navigable waters are covered by the CWA’s text.

The Court rejected both the Ninth Circuit’s test and respondent’s “proximate cause” test. Then, with help from one of Justice Breyer’s signature straight-from-the-19th-century hypotheticals, the Court dispatched Maui’s argument that the statutory word “addition” means the CWA covers only direct discharges: If Timmy is told to “add” water to his bath from the well, Timmy would understand that he could use a bucket to add the water. Ergo, the “addition” of pollutants from point sources to navigable water can cover additions via mediating sources like groundwater.

The Court steered a course to the middle between the Ninth Circuit’s standard and Maui’s test. It held that the CWA requires a permit “if the addition of the pollutants through groundwater is the functional equivalent of a direct discharge from the point source into navigable waters.”

Uncertainty rules. While this new “functional equivalent” test certainly is narrower than the Ninth Circuit’s “fairly traceable” test, important questions remain to be answered about its scope. The Court listssevenfactors that inform whether a discharge through groundwater requires a permit, but it generously caveats even that multifarious test. Those are “just some of the factors that may prove relevant (depending upon the circumstances of a particular case).” Time and distance travelled between the point source and the navigable water “will be the most important factors in most cases, but not necessarily every case.”

On the plus side, the Court helpfully—if also vaguely—instructed lower courts that its interpretation of the statute should not lead to an “unmanageable expansion” of permitting or “create serious risks . . . of undermining state regulation of groundwater.”

Securing more certainty regarding the limited scope of the new test will be important. As the Chamber argued in its amicus brief, CWA permits are extraordinarily expensive and time-consuming to obtain, but penalties for violations are crushing. A landowner trying to determine how the seven-factor test applies to his or her operations is between a rock and a hard place, forced to guess between obtaining a costly permit he might not need or facing heavy fines if he or she guesses wrong.

The Court assures that district courts will exercise discretion about imposing penalties where the need for a permit was unclear. But that is cold comfort to someone who must make the decision ex ante about whether to seek a permit.

The ball’s in EPA’s court.The lower courts may have the first opportunity to sort this out in practice. For example, the Ninth Circuit must now rule on whether the County’s wells meet the new functionally equivalent test.

And, on May 4, 2020, the court granted, vacated, and remanded inKinder Morgan v. Upstate Forever, in which the Fourth Circuit wrongly held that accidental discharges that make their way to groundwater “hydrologically connected” to navigable waters require a permit. So that court too will have an early opportunity to apply County of Maui.

But the player perhaps best suited to provide more certainty is the EPA. After the Court granted certiorari, EPA issued “Interpretative Guidance” that endorsed the County’s rule excluding groundwater discharges from CWA coverage. The Trump Administration has been reluctant about seeking deference to its regulatory guidance in the Supreme Court, and this case was no exception.

But the Court declared that no deference would have been forthcoming anyway. It found EPA’s interpretation “neither persuasive nor reasonable.” This was a strong statement coming from Justice Breyer, who is well-known for his respect for expert agencies. But it does not suggest that guidance or regulations from the Agency applying its expertise to explain the limited circumstances that are functionally equivalent to direct discharges would be ignored.

Any future regulations from EPA must comply with the Court’s seven-factor test. But the Court’s framework is flexible enough that EPA should have room to provide more concrete guidance to the regulated community, without running afoul of the Court’s authoritative construction of the statute. How EPA implements the seven-factor test will most likely be influenced by the election this November.

Aaron Street is a partner at Baker Botts LLP.