Potential Clean Water Act Liability extends to discharges to groundwater that reach surface water

The PIOGA Press

(by Lisa Bruderly and Kevin Garber)

On April 23, the Supreme Court, in a landmark decision, ruled that in certain circumstances discharges of pollutants through groundwater to navigable waters could be required to have an NPDES permit under the Clean Water Act (CWA). While the court remanded the Hawai’i Wildlife Fund v. County of Maui litigation to the Ninth Circuit to reconsider the specific issue of injected wastewater that reached the Pacific Ocean through lava tubes, it more broadly provided a new “functional equivalent” test to address whether the CWA requires an NPDES permit when pollutants originating from a point source are conveyed to navigable waters by a nonpoint source, such as groundwater.

Justice Stephen Breyer, writing for the 6-3 majority, held that an NPDES permit is required “when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge” (emphasis added). The court’s new test for CWA liability has far-reaching implications, creating potential exposure for agency permitting and enforcement and citizen suit pressure under many scenarios where pollutants may intentionally or unintentionally enter surface water by way of groundwater through Class V injection wells, pipeline leaks, spills and releases to ground, waste impoundments/ lagoons, existing groundwater contamination, leaking underground storage tanks and even septic tanks.

New “test” creates more questions than clarity
Subjective, conflicting interpretations of the new “functional equivalent” test are inevitable. Focusing primarily on considerations of time and distance, Justice Breyer offered the following two contrasting examples of how the test might be applied: (1) “where a pipe ends a few feet from navigable waters and the pipe emits pollutants that travel those few feet through groundwater (or over the beach), the permitting requirement clearly applies; and (2) “if a pipe ends 50 miles from navigable waters and the pipe emits pollutants that travel with groundwater, mix with much other material, and end up in navigable waters only many years later, the permitting requirements likely do not apply.”

The court offered that other factors, including the following, “may prove relevant,” depending on the specific circumstances:

  • The nature of the material through which the pollutant travels;
  • The extent to which the pollutant is diluted or chemically changed as it travels;
  • The amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source;
  • The manner by or area in which the pollutant enters the navigable waters; and
  • The degree to which the pollution (at that point) has maintained its specific identity.

The court also acknowledged that application of this test is not clear, offering that there are “too many potentially relevant factors applicable to factually different cases for this Court now to use more specific language.” Rather, the court seemingly opened the door for interpretations by the lower courts, encouraging them to “provide guidance through decisions in individual cases,” and, where appropriate, to “mitigate any hardship or injustice when they apply the statute’s penalty provision.”

The court also looks to the U.S. Environmental Protection Agency (EPA) to provide “administrative guidance” through issuance of individual permits and promulgation of general permits. However, there is a tension relying on current EPA guidance given the conflict between the court’s “functional equivalent” test and EPA’s April 23, 2019 Interpretive Statement, under which the agency considers releases of pollutants to groundwater to be categorically excluded from CWA permitting requirements. EPA plans to provide additional guidance in response to the court’s opinion.

Dissenting, Justice Samuel Alito captured the frustration and uncertainty likely to be felt by many in the regulated community when he wrote: “If the Court is going to devise its own legal rules, instead of interpreting those enacted by Congress, it might at least adopt rules that can be applied with a modicum of consistency. Here, however, the Court makes up a rule that provides no clear guidance and invites arbitrary and inconsistent application.”

Path forward for regulated entities is unclear

With similar matters currently before several circuit and district courts, interpretations of the “functional equivalent” test are expected to vary greatly, creating more confusion for entities that could now be subject to CWA liability, even if they are already regulated under a federal and/or state program. For example, in the County of Maui case, the injection wells were approved by EPA and the Hawaii Department of Health and had been operating since the 1970s. Similarly, the court’s ruling creates the potential for claims by agencies and citizens groups, even when, for example, groundwater remediation projects with potential surface water connections, are being conducted under a state or federally approved cleanup plan.

The ruling also creates interesting questions as to whether a court could hold an entity liable for not obtaining an NPDES permit when the discharge to surface water through groundwater is caused by a spill. For example, in Kinder Morgan Energy Partners, L.P. v. Upstate Forever, a pipeline ruptured and, though promptly repaired with state cooperation, resulted in residual gasoline in the soil and groundwater. The Fourth Circuit upheld a citizens’ suit action, concluding that the continued seepage of gasoline into surface water constitutes an “ongoing violation” of the CWA, even if the NPDES point source (i.e., the pipeline) is no longer releasing the pollutant. In deciding this matter, the Fourth Circuit examined whether pollutants in groundwater enter surface water by a “direct hydrological connection.” In response to a petition for writ of certiorari from the Fourth Circuit decision, the Supreme Court on May 4 vacated the Fourth Circuit’s judgment and remanded the matter for further consideration based on the County of Maui decision (i.e., the “functional equivalent” test). This remand demonstrates that, at this time, the Supreme Court does not intend to hear additional arguments regarding CWA liability for groundwater discharges.

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