Clean Water Act cases head to the high court

OT19

Suppose you operate a California wastewater reclamation facility. Your facility receives wastewater, which you then treat with chemicals. Suppose you then discharge the treated wastewater into the subsurface in order to recharge the groundwater basin. This helps replenish the basin's depleting groundwater levels, which also rehabilitates surface waters of hydrologically connected rivers, streams and lakes. Given California's perennial water shortages, you are helping solve a water crisis.

Now let's suppose that you receive a notice of violation alleging that your facility is violating the Clean Water Act. Are you now also a polluter?

On Feb. 19, the U.S. Supreme Court agreed to answer this question by taking up two cases involving whether the Clean Water Act regulates discharges of pollutants to groundwater.

When Is a Clean Water Act Permit Required?

The Clean Water Act prohibits the unpermitted addition of pollutants from point sources -- like pipes, wells, ditches or other conduits -- to jurisdictional surface waters of the United States. The typical activity the act covers involves a facility that conveys liquid byproduct from a pipe (a point source) directly to a nearby river (a jurisdictional water). Under the act, that facility must obtain a permit known as a National Pollutant Discharge Elimination System permit, or NPDES permit.

So what if that pipe doesn't go directly to the river, but instead goes downward and into groundwater that is hydrologically connected to the river? Because liquid byproduct is not discharged directly into the river, does the facility avoid the NPDES permit requirements? Last year, two federal circuit courts said, "No."

In the first case, County of Maui v. Hawai'i Wildlife Fund, the 9th U.S. Circuit Court of Appeals held that an NPDES permit is required for discharges of treated wastewater from an underground injection well since that wastewater is fairly traceable to the Pacific Ocean.

In the second case, Kinder Morgan Energy Partners LLP v. Upstate Forever and Savannah Riverkeeper, the 4th U.S. Circuit Court of Appeals similarly held that an NPDES permit was required when a ruptured underground pipe discharged petroleum to groundwater that had a direct hydrological connection to nearby jurisdictional tributaries and wetlands.

The Supreme Court will now consider whether these holdings were correct. Specifically, the Supreme Court will decide whether pollutants indirectly discharged to jurisdictional waters fall within the NPDES program.

What Does the Plain Text Say?

The Supreme Court's agreement to hear these cases presages that it will likely reverse the two holdings and find that the NPDES program does not regulate indirect discharges. How the court arrives at an answer, however, will be no easy task.

As noted, the Clean Water Act protects jurisdictional surface waters from discharges of pollutants from point sources like pipes. There's no question that groundwater is neither a point source nor a jurisdictional surface water under the act. What drives the parties' dispute is essentially the definition of the term "to." If the act prohibits the addition of pollutants to jurisdictional waters, does that cover only pollutants discharged from a point source directly to water? Or does it cover pollutants discharged from a point source in a way that is the functional equivalent of a direct discharge to water?

This semantic but important dispute highlights why the court will not easily depend on the act's plain text. On one hand, it seems clear that groundwater falls outside the NPDES program because groundwater is neither a point source nor a jurisdictional surface water. As one petitioner put it, this would be like saying zero plus zero equals one. It's not intuitively logical.

But on the other hand, the act requires a NPDES permit for discharges "to" navigable waters -- not "directly to" navigable waters. Thirteen years ago, the Supreme Court hinted at this interpretation in its fractured holding, Rapanos v. United States. There, in dicta, Justice Antonin Scalia's plurality opinion said that the act does not prohibit the "addition of any pollutant directly to navigable waters from any point source," but rather it prohibits the "addition of any pollutant to navigable waters." Because of this distinction, as Justice Scalia wrote, dischargers cannot circumvent the act by discharging pollutants to upstream watercourses that the act may not otherwise regulate.

The 4th and 5th Circuits seized upon Justice Scalia's plain text interpretation of the act to underpin their holdings regulating indirect discharges. This presents a hurdle for those arguing to overturn the lower courts' decisions. If the Supreme Court does reverse, it may do so on the basis that Justice Scalia's comments were dicta only.

Will Regulating Indirect Discharges Infringe upon States Rights?

An important issue that the Supreme Court must address is the role of states' rights. Before adopting the Clean Water Act in 1972, Congress considered the Aspin Amendment, which would have incorporated certain bodies of groundwater into the act's NPDES program. The amendment failed because Congress lacked the "knowledge and technology" at the time to understand the jurisdictional difficulties related to how groundwater differs from state to state. Thus, Congress then limited the federal government's role in groundwater regulation to information gathering and encouraging state regulation.

Congress has yet to amend the act to significantly change this federal-state relationship. Thus, critics of the 4th and 9th Circuit holdings fear that judicially formalizing the indirect discharge theory of liability under the act will disrupt Congress' intended federal-state balance.

How Will a Holding Impact the Environment and Regulated Community?

Critics also fear the effects that an indirect discharge theory of liability may have on the environment and regulated community.

In the example of the California wastewater reclamation facility, it is likely regulated by other federal laws like the Safe Drinking Water Act, CERCLA, RCRA and/or the Coastal Zone Act. It is also likely regulated by state land use laws like the California Environmental Quality Act, and other environmental laws like the Sustainable Groundwater Management Act. Although these laws don't allow for setting aside the Clean Water Act's requirements, they regulate groundwater discharges in specific, possibly contradictory ways.

These other laws also demonstrate the regulatory complexities imposed on the regulated community. Determining what laws and permits apply is an important but complicated process for any project. It can be expensive. When an NPDES permit is added to the mix, it increases these costs. Typically, obtaining a NPDES permit takes multiple years and often costs about $300,000.

These additional costs will strain the budgets of public agencies that depend on public funds to operate. So, if a public agency is considering whether, for example, to undertake a potable reuse project that involves discharging treated water into groundwater, the permitting costs and potential liabilities associated with those discharges under the Clean Water Act may make an already expensive project even more cost-prohibitive. In dry states like California, this risks jeopardizing creative efforts to mitigate water scarcity problems.

How Do We Move Forward from Here?

The regulated community fears that upholding the lower courts' rulings will substantially expand the Clean Water Act's jurisdiction. Proponents of the indirect discharge theory respond that these fears are "alarmist" since the act has always regulated groundwater discharges. This response is doubtful. After all, the county's facility in County of Maui operated for nearly 40 years before any regulator even hinted that the facility required an NPDES permit.

In the 50 years since its enactment, the act has achieved monumental success in cleaning up the nation's waterways. This half-century old law is an example of successful environmental legislation. But now, the act is proving to be as unclear as it is old. Because of vastly improved technology since 1972, we now have a far more comprehensive understanding of the interaction between pollution and hydrologic cycles. Imposing creative new theories of liability based on the statute's ambiguous text breeds uncertainty, which benefits neither the environment nor the regulated community.

This situation cries out for legislative action. Should the Supreme Court avoid a fractured ruling like that in Rapanos, it will help resolve some of the current uncertainty. But until Congress acts, the regulated community will remain subject to an ambiguous statute and potential litigation, and new projects as well as operating facilities will be caught in the middle.