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U.S. Supreme Court Finds ‘Functional Equivalent’ Test Guides the Inquiry Whether an NPDES Permit is Required for Groundwater Point Sources that Link to Waters of the U.S.

U.S. Supreme Court Finds ‘Functional Equivalent’ Test Guides the Inquiry Whether an NPDES Permit is Required for Groundwater Point Sources that Link to Waters of the U.S.
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By Travis Brooks

On April 23, in County of Maui v. Hawaii Wildlife Fund,  the U.S. Supreme Court provided an answer to a question that long divided lower courts interpreting the federal Clean Water Act (CWA). There has never been any doubt that the CWA requires National Pollutant Discharge Elimination System permits (NPDES) for discharges of pollutants from point sources into waters of the United States (WOTUS). There has also never been any doubt that the CWA does notrequire a NPDES for discharges of pollutants from point sources into groundwater—states are primarily responsible to regulate such discharges. However, until recently, it was unclear if NPDES permits are required for discharges of pollutants from point sources that enter into groundwater and then migrate into WOTUS.


In a 6-3 decision, the Supreme Court answered this question with a reasonable, but possibly difficult to apply “sometimes.” The decision, authored by Justice Breyer can be distilled into what seems like a straightforward rule:

“. . .we conclude that the [CWA provisions requiring a NPDES permit] require a permit if the addition of the pollutants through groundwater is the functional equivalent of a direct discharge from a point source into navigable waters.”

However, determining just what the “functional equivalent of a direct discharge” is under the Court’s decision will likely vex courts, practitioners, and the regulated community for some time. To determine what discharges are “functionally equivalent” to a direct discharge into WOTUS, the Court created a murky test that depends on the application of at least seven,  and maybe more, factors with little clear direction provided as to how to apply those factors. Ultimately it will be up to courts and perhaps the U.S. Environmental Protection Agency (EPA) to further hone and implement the Court’s decision.

The Clean Water Act

In 1972, Congress enacted the CWA  “to restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” The CWA had ambitious goals to eliminate the discharge of pollutants into navigable waters by 1985, and to ensure water quality in national waters so that all were “fishable” and “swimmable” by 1983. Although these goals were not met, federal and state efforts to improve nationwide water quality under the CWA continue. The CWA defines “navigable waters” as WOTUS, which can otherwise be understood as all “jurisdictional waters” over which the federal government has power to regulate under the CWA. Just what constitutes WOTUS subject to CWA regulation has itself been subject to much dispute, with the EPA promulgating multiple definitions of regulated waters in the last decade alone.

The CWA embodies the idea of a federal-state partnership where the federal government sets the agenda and standards for water pollution abatement, while states are primarily responsible to carry out day-to-day implementation and enforcement activities. Moreover, while the CWA gives the federal government power to regulate discharges into WOTUS, states have generally been left to regulate and control discharges of pollution into groundwater.

In its relevant part, the CWA prohibits: “any addition of any pollutant to navigable waters from any point source” without a permit. The CWA defines the term “pollutant” broadly, as including a wide range of deposited materials including sewage, dredged materials, solid waste, chemical equipment, rock, dirt, sand, and so on. Point sources are defined as “any discernible, confined and discrete conveyance… from which pollutants are or may be discharged.” As an example, these include “any container, pipe, ditch, channel, tunnel, conduit, or well.” “Discharge of pollutant” is defined as “any addition of any pollutant to navigable waters [including navigable streams, rivers, the ocean or coastal waters] from any point source.”

In the years preceding the County of Maui decision, lower federal courts  were divided on one crucial point—how pollution discharges from a point source into groundwater that eventually reach WOTUS should be regulated. Leading up to the decision, courts had adopted three different methods of interpreting when discharges from point sources into groundwater discharge into navigable waters thus requiring a NPDES permit: 1) pollutants are added to navigable waters, thus requiring a NPDES permit only if they are discharged directly from a point source into jurisdictional waters, (i.e., never when added into groundwater first), 2) pollutants are regulated where there is a direct hydrological connection between groundwater pollution and jurisdictional waters (i.e., sometimes when added into groundwater first), and 3) pollutants into groundwater are regulated whenever a discharge of pollution into jurisdictional waters can be traced to what came out of a point source (i.e., often when added into groundwater first). This split of authorities teed up the issue for the Court in County of Maui.

Factual and Procedural History of County of Maui

In the 1970s, the County of Maui (County) constructed the Lahaina Wastewater Reclamation Facility. The facility collects sewage from the surrounding area, partially treats it, and then pumps the treated water into four wells 200 or more feet below ground level. Very much of this partially treated water,  or approximately 4 million gallons a day, enters a groundwater aquifer and then makes its way, over approximately half a mile or so, to the ocean.

In 2012, a number of environmental groups brought a citizen CWA lawsuit alleging that the County was discharging a pollutant into navigable waters (i.e. the Pacific Ocean) without having first obtained a NPDES permit. The U.S. District Court for Hawaii reviewed a detailed study of discharges from the sewer facility and found that a considerable amount of tainted water, pumped into the facility’s wells, ended up into the ocean. Ultimately the District Court sided with the environmental groups, holding that because “the path [from the facility] to the ocean is clearly ascertainable…,” the discharge into the wells was “functionally one into a navigable water.” The District Court then granted summary judgment in favor of the environmental groups.

The County appealed the decision to the Ninth Circuit Court of Appeals, which affirmed the District Court, but articulated a slightly different standard for determining when a NPDES permit is required for discharges into groundwater. Under this standard, a NPDES permit is required when “pollutants are fairly traceable from the point source to a navigable water such that the discharge is the functional equivalent of a discharge into navigable water.”  The Ninth Circuit did not undergo any type of analysis of determining when, if ever, the connection of a point source and a navigable water is too tenuous or remote to give rise to liability, thus creating a very broad extension of the CWA’s applicability.

The County petitioned for certiorari and the U.S. Supreme Court granted the petition.

The U.S. Supreme Court’s Decision

The majority’s 6-3 decision authored by Justice Breyer began by noting that the key question presented in the case concerned the statutory word “from.” Breyer noted that at bottom, the parties disagreed “dramatically about the scope of the word ‘from’” in the context of the CWA.

On one hand, the County argued that in order for a pollutant to be placed in national waters “from a point source,” a point source must place pollutants directly into WOTUS without passing through intermediate conveyance such as groundwater or isolated surface water. On the other hand, the environmental groups argued that the permitting requirement applies as long as a pollutant is “fairly traceable” to a point source, even if it traveled for a significant amount of time over a significant distance through groundwater to reach WOTUS.

Majority Rejects the County and U.S. Solicitor General’s Highly Restrictive Interpretation of the Clean Water Act

The County and the Solicitor General for the United States argued for a clear, “bright-line” test for point source pollution. Essentially in order to be liable, a point source must be “the means of delivering pollutants to a navigable water.” Therefore, if “at least one nonpoint source (e.g., unconfined rainwater runoff or groundwater” exists between the point source and the jurisdictional water, then the permit requirement does not apply. Put another way, a pollutant is “from” a point source, only if a point source is the last conveyance that conducted the pollutant to jurisdictional waters.

It is interesting to note that before supporting the County’s arguments, the federal administration originally supported parts of the environmental group’s arguments at the District Court level. Thus before the case reached the Supreme Court, the EPA maintained that the CWA’s permitting requirement applies whenever discharges migrate into Waters of the United States with a “direct hydrological connection” to surface water. However, after seeking public comments in 2018 on whether it should change its interpretation, the EPA essentially “did a 180,” issuing an interpretive statement in April of 2019 that “the best, if not the only” interpretation of the CWA was to exclude all releases of pollutants into groundwater from the NPDES requirement.

The majority took issue with this interpretation, and found that it would create a giant loophole in the CWA’s regulations on point source pollution. To accept the County and the Solicitor General’s interpretation of the CWA, a NPDES permit would not be required if there was any amount of groundwater between the end of a polluting pipe and jurisdictional waters. As the majority noted:

“. . .[i]f that is the correct interpretation of the [CWA], then why could not the pipe’s owner, seeking to avoid the permit requirement, simply move the pipe back, perhaps only a few yards, so that the pollution must travel through at least some groundwater before reaching the sea”?

What About Chevron Deference?

Neither the EPA nor the Solicitor general asked the court to apply Chevron deference to the EPA’s interpretation of the EPA. In any event, the Court noted that though it will typically pay “particular attention to an agency’s views” when interpreting a statute that the agency enforces, the Court simply would not follow the EPA’s proposed interpretation which would create a loophole that would effectively eviscerate the basic purposes of the CWA. In other words: “to follow EPA’s reading would open up a loophole allowing easy evasion of the statutory provision’s basic purposes. Such an interpretation is neither persuasive nor reasonable.”

Did Congress Intend to Exclude Discharges into Groundwater?

The Court looked to the structure of the CWA as a further basis to reject the County and Solicitor General’s interpretation. Just because the CWA does not subject all pollution into groundwater to its permitting requirement, this does not indicate a clear congressional intent to exclude all discharges into groundwater from the CWA’s permit requirement. If Congress intended to exclude all discharges into groundwater from the NPDES permitting requirement, it could have easily excluded point source pollution into groundwater as an one of the enumerated exemptions to permitting requirements, it did not do so. Moreover, the CWA expressly includes “wells” in its definition of “point source.” As the court noted, in instances where wells were regulated point sources, such wells “most ordinarily would discharge pollutants through groundwater.”

Majority Rejects the Very Broad Reading of the CWA Argued by the Environmental Groups

Regarding the broad interpretation of the CWA pushed by the environmental groups, the Court noted that with modern science the CWA could have unreasonably wide reach. Under this interpretation, the EPA could likely assert permitting authority over the release of pollutants “many years after the release of pollutants that reach navigable waters many years after their release….and in highly diluted forms.”  In the Court’s view, Congress did not intend to require point source permitting if subject pollution was merely traceable to a point source. This could create circumstances where a permit was required in:

“. . .bizarre circumstances, such as for pollutants carried to navigable waters on a bird’s feathers or,. . . .the 100-year migration of pollutants through 250 miles of groundwater to a river.”

The environmental groups sought to address concerns that their standards extended the CWA permit requirement too broadly by proposing a “proximate cause” basis for determining when a permit is required. Under this test a polluter would be required to secure a permit that polluter’s discharge from a point source proximately caused a resulting discharge into jurisdictional waters. The Court rejected the environmental groups’ proposed proximate cause test noting that proximate cause derives from general tort law and is based primarily on its own policy considerations that would not significantly narrow the environmental groups broad reading of the CWA .

Perhaps most important, the Court noted that the environmental groups’ broad reading of the CWA would essentially override Congress’ clear intention to leave substantial authority and responsibility to the states to regulate groundwater and nonpoint source pollution. States, with federal encouragement, have already developed methods of regulating nonpoint source and groundwater pollution through water quality standards and otherwise. The environmental groups’ interpretation of the CWA also conflicted with the legislative history related to CWA’s adoption, which clearly indicated that Congress rejected an extension of the EPA’s authority to regulate all discharges into groundwater.

Majority Adopts a Reasonable, Albeit Murky, Middle Ground Interpretation of the CWA

Finding problems with both of the above interpretations, the Court’s majority landed at a third option that amounts to a reasonable, albeit murky middle ground. Justice Breyer fairly thoroughly examined the meaning of the word “from” within the context of the CWA with reference to everyday use of the word in how we refer to immigrants and travelers from Europe and even how meat drippings from a pan or cutting board into gravy. Ultimately, the standard the Court adopted was  “significantly broader” than the “total exclusion of all discharges through groundwater” pushed by the County and the Solicitor General, but also meaningfully more narrow than that pushed by the environmental groups.

As noted above, the Court described its rule as follows:

“. . .[w]e hold that the [CWA] requires a permit when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge.”

This means that the addition of a pollutant falls within the CWA’s regulation:

“When a point source directly deposits pollutants into navigable waters or when the discharge reaches the same result through roughly similar means. “

The majority opinion makes clear that “time and distance” will typically be the most important factors when determining whether a discharge into groundwater or another receptor is the “functional equivalent” of a discharge into jurisdictional waters.

Justice Breyer noted that there were some difficulties in applying its rule because it does not provide a clear direction to courts and agencies as to how to deal with “middle instances” where the facts do not clearly indicate a discharge is or is not “functionally equivalent” to a direct discharge. However Justice Breyer noted that “there are too many potentially relevant factors applicable to factually different case for the Court now to use more specific language.”

The majority then provided a non-exclusive list of seven factors that may be relevant depending on the circumstances of a particular case:

Transit time of the pollutant,

Distance traveled,

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 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 has maintained a specific identity.

Importantly, the Supreme Court’s opinion did not provide much guidance as to how to balance and apply the above factors except that “[t]ime and distance will be the most important factors in most cases, but not necessarily every case.”

Ultimately, the majority opinion reflects a concern that a rule categorically excluding application of the CWA in instances where point sources pollute groundwater, would result in potentially widespread evasion of CWA permitting requirements. If the Court were to adopt the County’s interpretation of the CWA, what would stop polluters from simply adjusting their point source pipes so that they drained onto the beach or other area so that it enters groundwater instead of directly into WOTUS, thus averting federal regulation? On the other hand, accepting the environmental group’s broad interpretation of the CWA would expand the NPDES permitting program to many, if not most instances where point source pollution enters groundwater. This would clearly upset the framework of federal and state regulation of water pollution depending on where it is deposited.

Ultimately, the opinion reflects a practical view of the CWA and its incorporation of the word “from” with reference to point sources and jurisdictional waters. Here, although most sewage treatment facilities in the country that discharge effluent into jurisdictional waters require a NPDES permit up to CWA standards, the County was effectively adding 4 million gallons a day of pollutants into the Pacific Ocean without a NPDES permit. In the Court’s view, those additions of such pollutants into waters of the United States that look and feel like the addition of pollutants into waters of the United States,  even if they must pass through some groundwater over a short distance and time to get there, must require an NPDES permit. The wells below the Lahaina Wastewater Reclamation Facility were one of those instances.

Justice Thomas’ Dissent

Justice Thomas penned a dissent to the opinion to which Justice Gorsuch joined. Justice Alito filed his own dissent. Both dissenting opinions included their own esoteric arguments about the meaning of the word “from,” but ultimately came down to the justices’ restrictive reading of federal regulatory authority under the CWA and an emphasis on the CWA’s intent to leave regulation of groundwater pollution to the states.

The Thomas and Gorsuch dissent focused on the CWA’s use of the word “addition” to reference the regulated pollutants “from” a point source into navigable waters. After reviewing various definitions of the word “addition” which Thomas noted means to “augment” or “increase” or to “join or unite,” Thomas concluded that “[t]he inclusion of the term “addition” to the CEWA indicates that the statute excludes anything other than a direct discharge.”

In other words, the only point source pollution that requires an NPDES permit is that pollution that discharges directly from the point source to Waters of the United States. Thomas also highlighted the uncertainty that the Court’s functional equivalent test would create, with seven non-exhaustive factors, and no clear rule when or how to apply them. Moreover, Thomas was persuaded by CWA’s underlying state and federal delegation of authority.

Justice Alito’s Dissent

Justice Alito posited a similar position to Thomas, stating that the CWA only required NPDES permits for direct additions of pollutants into federal waters. However, Alito pointed out that given the CWA’s broad definition of a “point source” which includes ditches and channels, and any “discernable, confined and discrete conveyance… from which pollution may be discharged,” a shortened pipe that added pollution to a beach, would then likely enter into some discrete channel on the beach that would meet the definition of a “point source” subject to regulation under the CWA. This reading of the CWA in Justice Alito’s opinion was more manageable and ready for uniform application throughout the country than the one promulgated by the Court. Alito also referenced the CWA’s delegation of state and federal authority to regulate different types of pollution. He also took issue what he thought was an overly complicated and less workable standard enunciated by the majority.

Conclusion and Implications

What do we make of all this? If courts, practitioners, or the regulated community were looking for a clear answer as to which discharges from point sources that migrate through groundwater into WOTUS require an NPDES permit, the County of Maui decision likely left them disappointed. There is no question the fact-dependent and purpose driven test enunciated by the Court will result in some uncertainty as the decision is refined and clarified by lower courts. However, as the Supreme Court noted, the “functionally equivalent” test is not altogether different than the standard the EPA has tried to apply for more than 30 years by seeking to require NPDES permits for “some (but not all) discharges through groundwater.” Ultimately, the Court’s decision may have been the most appropriate “middle-ground” interpretation of CWA language that is fundamentally ambiguous and difficult to apply in the real world.

Time will tell whether or not the EPA tries to add some clarity to the Supreme Court’s standard by adopting a rule defining “functional equivalency.” In this regard,  the results of the 2020 presidential election may have a meaningful impact on the way the “functionally equivalent” test is formulated and applied.

In any event, the regulated community should consider the implications of this decision. If entities own facilities that deposit pollutants into groundwater or other areas that may ultimately reach Waters of the U.S., such entities should consider whether it makes sense to pre-emptively seek an National Pollutant Discharge Elimination System permit and thus avoid liability concerns going forward.

Travis Brooks is an associate at Miller Starr Regalia, Walnut Creek, California.