New Clean Water Act developments, same uncertainty

The PIOGA Press

(by Lisa Bruderly and Gary Steinbauer)

Despite a recent federal rulemaking on the definition of “waters of the United States” (WOTUS) and the anticipated U.S. Supreme Court matter, County of Maui v. Hawai’i Wildlife Fund, the scope of the federal government’s authority under the Clean Water Act (CWA) could remain in flux.

Even before its publication in the Federal Register, opponents of the WOTUS rulemaking vowed to file legal challenges. Furthermore, a recently announced settlement in the County of Maui case could prevent the Supreme Court from deciding whether point source discharges that travel through groundwater before reaching a jurisdictional surface water are regulated by the CWA. The threatened legal action on the WOTUS rulemaking and the announced settlement in County of Maui could prevent regulated parties from receiving much needed clarity on key jurisdictional issues under the CWA.

WOTUS final repeal rule and new definition

Step 1. On September 12, the U.S. Environmental Protection Agency (EPA) and the Army Corps of Engineers released a pre-publication version of a final rule repealing the Obama administration’s 2015 rule redefining WOTUS under the CWA, typically referred to as the “Clean Water Rule” (CWR). The repeal rule becomes effective 60 days after publication in the Federal Register, which had not yet occurred as of October 7. Major national environmental groups and states have already

vowed to challenge the rulemaking.

The final repeal rule could end the existing regulatory patchwork where the CWR’s definition currently is in place in 22 states (including Pennsylvania) and the pre-2015 definition of WOTUS is in effect in 27 states and recodify the pre-2015 definition of WOTUS consistently across the United States. According to the EPA and

Corps, restoring the pre-2015 CWA jurisdictional regime is appropriate to remedy the identified deficiencies in the CWR’s expansive WOTUS definition.

However, while regulated parties have a long track record of implementing the pre-2015 definition, as informed by applicable guidance documents and

Supreme Court precedent, the pre-2015 definition of WOTUS has also been criticized as leading to inconsistent determinations based on its case-by-case approach to determining whether a water is subject to CWA jurisdiction. Furthermore, the pre-2015 definition of WOTUS is the subject of a fractured U.S. Supreme Court decision in Rapanos v. United States, 547 U.S. 715 (2006), which has been inconsistently applied by federal appellate courts. With challenges to the repeal rule expected

when finalized, the repeal rule may not provide needed clarification to the regulated community. Litigation likely will be filed in multiple federal district courts. The regulatory patchwork of different WOTUS definitions may continue if any of these lawsuits is successful in obtaining a stay of the repeal rule.

Step 2. The repeal rule completes step one of the agencies’ two-step process to implement a 2017 executive order issued by President Trump. Step two of the process involves replacing the CWR’s definition of WOTUS with a revised definition of the term. On February 14, the agencies published a proposed rule to revise the definition of WOTUS. The comment period on the proposed rule ended on April 15. The agencies reportedly received and are reviewing more than 621,000 comments on this proposed definition. EPA’s senior water official has indicated that the agencies plan to take final action on the proposed revised definition of WOTUS by this winter.

Litigation in the district courts challenging any revised WOTUS definition is a near certainty, with the potential for one or more stays of the new definition if any such challenges are successful. Arguably, any stay or stays could result in a new patchwork of WOTUS definitions, where some states rely on the new definition and other states rely on an older definition of WOTUS.

Potential County of Maui settlement

On November 6, the U.S. Supreme Court is scheduled to hear oral argument in the first groundwater “conduit theory” case to reach it, the County of Maui matter. As background, environmental groups sued the County of Maui alleging CWA violations when treated sanitary effluent that it injected into four permitted underground injection wells traveled underground some distance through groundwater before reaching the Pacific Ocean roughly 80 days later. Background articles regarding “conduit theory” can be found in the November 2018 issue of The PIOGA Press and on Babst Calland’s website.

In February 2019, the Supreme Court agreed to review the Ninth Circuit’s February 1, 2018, decision holding that the CWA regulates discharges of pollutants that reach jurisdictional surface waters after traveling through hydrologically connected groundwater. More specifically, the Supreme Court granted a petition for a writ of certiorari to decide “whether the CWA requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, such as groundwater.”

The Ninth Circuit held that the wells at issue were “point sources,” and so long as pollutants are “fairly traceable” from the “point source” and more than a de minimis amount of pollutants reach a jurisdictional surface water, such discharges are regulated under the CWA. Hawai’i Wildlife Fund v. County of Maui, 886 F.3d 737, 749 (9th Cir. 2018).

County of Maui is the first “conduit theory” case that the Supreme Court has agreed to hear, with the Fourth, Sixth and Ninth Circuit Courts clearly split on how to apply CWA liability. The Fourth Circuit generally agreed with the Ninth Circuit’s interpretation extending CWA liability for migrating groundwater contamination in Upstate Forever v. Kinder Morgan Energy Partners, L.P., 887 F.3d 637 (4th Cir. 2018).

The Upstate Forever matter involves allegedly ongoing contamination from a previously repaired gasoline pipeline, a very different set of underlying facts as compared with County of Maui. The Fourth Circuit concluded that pollutants originating from a point source (i.e., the ruptured pipeline) that continue to migrate through groundwater with a “direct hydrologic connection” to surface water are regulated by the CWA, even though the pipeline leak had been repaired almost immediately and was being addressed under state remediation requirements. In contrast, subsequent decisions by the Fourth and Sixth Circuits involving inactive coal ash impoundments and landfills have found that such structures are not “point sources” under the CWA. Sierra Club v. VEPCO, 903 F.3d 403 (4th Cir. 2018); Tenn. Clean Water Network v. Tenn. Valley Auth., 905 F.3d 436 (6th Cir. 2018); Ky. Waterways Alliance v. Ky. Utilities Co., 905 F.3d 925 (6th Cir. 2018).

Recent developments, however, may prevent the Supreme Court from deciding the County of Maui matter. On September 20, the Maui County Council voted 5- 4 to settle the pending petition and for the County to seek a CWA National Pollutant Discharge Elimination System (NPDES) permit. The mayor of Maui County, however, has indicated that county council does not have the authority to withdraw the appeal on its own, and that the mayor has the ability to make the ultimate decision as to whether the Supreme Court petition remains on the docket. As of the publication of this article, the dispute over who has the authority (i.e., county council or mayor) remains unresolved.

The potential withdrawal of County of Maui matter would mean that the Supreme Court would not resolve the circuit split on the scope of the CWA’s NPDES permit program, at least for now. A petition to review the Fourth Circuit’s decision in Upstate Forever is also pending. If the County of Maui appeal is withdrawn, the Supreme Court could take up the Upstate Forever case at some point in the future. Meanwhile, EPA’s April 2019 interpretive guidance, concluding that releases of pollutants to groundwater are categorically excluded from the CWA’s NPDES permitting requirement, remains in effect nationwide, except for the Fourth and Ninth Circuits. Therefore, until the Supreme Court resolves the circuit split, regulated parties in the Fourth and Ninth Circuits, including members of the oil and gas industry, will be subject to potentially more expansive requirements under the CWA.

Clarity on key CWA jurisdictional issues hangs in the balance as litigants prepare to challenge the agencies’ final repeal rule and jockeying continues on the potential settlement in the County of Maui matter. Babst Calland is actively monitoring these developments and evaluating their potential effect across sectors and industries, including the oil and gas sector. If you have any questions, please contact Lisa M. Bruderly at 412-394-6495 or lbruderly@babstcalland.com or Gary E. Steinbauer at 412-394-6590 or gsteinbauer@babstcalland.com.

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