Sixth Circuit Decisions Create Circuit Split on Clean Water Act’s Regulation of Discharges to Groundwater

Environmental Alert

(by Lisa M. Bruderly and Gary E. Steinbauer)

In two highly anticipated companion decisions, the U.S. Court of Appeals for the Sixth Circuit ruled that the Clean Water Act (CWA) does not extend liability to pollution that reaches surface waters through groundwater. The Sixth Circuit declined to join the Fourth and Ninth Circuits, which earlier this year held that the CWA regulates discharges of pollutants that reach “navigable waters” after traveling through hydrologically connected groundwater. The conflicting decisions arguably broaden the scope of the CWA’s National Pollutant Discharge Elimination System (NPDES) permitting program in the 14 states and 2 territories within the Fourth and Ninth Circuits and narrow the scope of the NPDES program in the four states within the Sixth Circuit. The Circuits’ disagreement on the scope of the CWA makes it even more likely that the Supreme Court will weigh in on this important issue.

Factual and Legal Background

On September 24, 2018, the Sixth Circuit issued a pair of decisions in two cases involving CWA citizen suits brought by environmental groups seeking to hold coal-fired utility companies liable for alleged unauthorized discharges from coal ash ponds or impoundments. Kentucky Waterways Alliance & Sierra Club v. Kentucky Utilities Co., No. 18-5115 (6th Cir. Sept. 24, 2018); Tennessee Clean Water Network v. Tennessee Valley Auth., No. 17-6155 (6th Cir. Sept. 24, 2018). The facts of each case are similar, even though they were appealed to the Sixth Circuit at different procedural stages. Unless specifically referred to in this Alert, we address these decisions collectively.

In Kentucky Waterways Alliance & Sierra Club v. Kentucky Utilities Company (KWA), the plaintiff environmental groups filed a CWA citizen suit against the owner of a coal-fired power plant for alleged violations of the CWA and the Resource Conservation and Recovery Act (RCRA). The plaintiffs’ complaint alleged that two coal ash ponds contaminated groundwater and the contaminated groundwater flowed through karst topography into a nearby surface water. The district court dismissed the plaintiffs’ claims, holding that (1) the CWA did not apply; and (2) the plaintiffs’ lacked standing to bring their RCRA claim. The plaintiffs then appealed the district court’s order dismissing their complaint.

By contrast, the district court in Tennessee Clean Water Network v. Tennessee Valley Authority (TCWN), did not issue its decision until after a bench trial. Like the plaintiffs in KWA, the plaintiffs in TCWN brought a citizen suit against the Tennessee Valley Authority (TVA) for alleged violations of the CWA and NPDES permit stemming from alleged discharges from a former coal ash pond that was later converted into a dry coal ash landfill and a series of active coal ash ponds. The TCWN plaintiffs asserted that these coal ash disposal units were leaking and contaminated groundwater was traveling through a direct hydrologic connection to a nearby river, in violation of the CWA. Based on the same facts, the district court also found TVA liable for the alleged violations of its NPDES permit. Following the trial, the district court ordered TVA to “fully excavate” approximately 13.8 million cubic yards of coal ash from the units and relocate it to a lined disposal facility. Due to the high costs associated with its remedy, the district court declined to assess a civil penalty against TVA. TVA then appealed the district court’s decision.

The Majority Rejects CWA Liability

While it issued separate decisions in the KWA and TCWN appeals, both the majority and dissenting opinions in the KWA and TCWN appeals (collectively, the Majority and Dissent, respectively) are substantially similar. In both cases, the same two judges (Judges Richard Suhrheinrich and Julia Gibbons) held that the CWA did not cover pollution that reaches surface waters via groundwater. The Majority categorized the plaintiffs’ CWA claims under two separate theories: the “point source” theory and the “hydrological connection” theory.

“Point Source” Theory – Quickly disposing of the “point source” theory, the Majority found that neither the groundwater carrying the alleged pollution nor the karst topography through which it travels are a “point source” under the CWA. A “point source” is defined under the CWA as a “discernible, confined, and discrete conveyance” 33 U.S.C. § 1362(14). The Majority parsed each term within this definition and ultimately held that “groundwater is a ‘diffuse medium’ that seeps in all directions, guided only by the general pull of gravity.” Similarly, even though the karst topography underlying the coal ash ponds may allow the allegedly contaminated groundwater to reach a surface water more quickly, the Majority rejected the plaintiffs’ contention that karst topography itself was a “point source.” In sum, the plaintiffs’ “point source” theory was rejected as inconsistent with the CWA’s text.

“Hydrological Connection” Theory – Calling it the “backbone” of the plaintiffs’ argument, the Majority held that the text of the CWA foreclosed the plaintiffs’ claims under the “hydrological connection” theory. The Majority first focused on the term “effluent limitations,” which are defined by the CWA to include limitations on the amount of pollutants that may be “discharged from point sources into navigable waters.” 33 U.S.C. § 1362(11). Noting that the word “into” connotes directness or a point of entry, the Majority held that “for a point source to discharge into navigable waters, it must dump directly into those navigable waters – the phrase ‘into’ leaves no room for intermediary mediums to carry the pollutants.” Unlike the Fourth and Ninth Circuit decisions earlier this year, the Majority in KWA and TCWN refused to rely on dicta in Justice Scalia’s plurality opinion in Rapanos v. United States, 547 U.S. 715 (2006), finding that Rapanos is not binding in this context and even if it were, Rapanos did not involve the “point-source-to-nonpoint-source” allegations at issue in the Sixth Circuit cases.

The Majority also held that recognizing the “hydrological connection” theory would upend the mutually exclusive regulatory frameworks of the CWA and RCRA. RCRA’s definition of “solid waste” excludes “industrial discharges which are point sources” subject to the CWA’s NPDES permit program. 42 U.S.C. § 6903(27). Consequently, the Majority held that if it were to find the utility companies liable under the CWA, the companies’ coal ash storage and treatment practices would be exempt under RCRA. Moreover, the Majority noted that reading the CWA to cover the migrating groundwater contamination allegedly caused by the coal ash ponds would gut or “leave virtually useless” the EPA’s 2015 regulations governing the disposal of coal combustion residuals (CCR) (e.g., coal ash) in landfills and surface impoundments. See 40 C.F.R. §§ 257.50-257.107.

Although it refused to find the defendants liable under the CWA, in the KWA appeal, the Sixth Circuit ultimately reversed the district court’s dismissal of the plaintiffs’ claim under RCRA.

Companion Dissenting Opinions

In strongly worded dissents, Sixth Circuit Judge Eric Clay disagreed with the Majority’s conclusion that the CWA did not regulate pollution that travels through groundwater before reaching a navigable water and, instead, would allow plaintiffs to file CWA lawsuits under the “hydrological connection” theory. Agreeing with and quoting the recent Fourth and Ninth Circuit decisions, Judge Clay would have ruled that the CWA regulates point source discharges traveling briefly through groundwater before reaching a navigable water. The Majority’s logic, according to the Dissent, would create a “gaping regulatory loophole” by allowing dischargers to add pollutants to navigable waters as long as the pollutants travel through an intermediate medium.

Judge Clay also saw no issues with the CWA regulating the addition of a CCR to a navigable water and RCRA regulating the storage and management of such CCR. Therefore, unlike the Majority, he did not believe regulation under one of these programs precludes regulation under the other. He argued that this interpretation of the two statutes was supported by EPA’s own statements and the Court should defer to EPA’s interpretation.

Clear Circuit Split

The debate over whether groundwater seepage to a water of the United States is regulated under the CWA rages on. The Sixth Circuit, in the KWA and TCWN appeals, declined to join the Fourth and Ninth Circuits in arguably expanding the CWA to cover discharges traveling through groundwater that has a “direct hydrological connection” to a navigable water or “water of the United States.” With a clear split in the Circuits, the odds that the U.S. Supreme Court will decide this issue have certainly increased. In fact, the defendants in the Fourth Circuit’s decision in Upstate Forever v. Kinder Morgan and the Ninth Circuit’s decision in Hawai’i Wildlife Fund v. County of Maui have already filed petitions for certiorari seeking Supreme Court review.

Notwithstanding the differences in opinion among the Fourth, Sixth, and Ninth Circuits, as a result of the KWA and TCWN decisions, regulated parties in CWA lawsuits alleging the “point source” theory and/or the “hydrological connection” theory now have more persuasive precedent as support  when facing allegations of an unauthorized discharge under the CWA from inactive treatment ponds, lagoons, landfills, and other similar sources. While the Sixth Circuit in KWA and TCWN did not expressly address whether coal ash ponds were “point sources” under the CWA, it implicitly agreed with the Fourth Circuit’s decision in the Sierra Club v. Virginia Electric Power Company appeal, which Babst Calland addressed in a recent Environmental Alert.

Babst Calland will continue to monitor developments in the citizen suits seeking to expand liability under the CWA and will be watching the Supreme Court closely as it decides whether to weigh in. If you have any questions about the Sixth Circuit’s decisions in KWA and TCWN or how they may impact your operations and compliance obligations, please contact Lisa M. Bruderly at (412) 394-6495 or, or Gary E. Steinbauer at (412) 394-6590 or

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