The much-anticipated United States Supreme Court decision in County of Maui v. Hawaii Wildlife Fund was released last week.  It is a fascinating decision that results in the Court adopting a “functional equivalent” test.  [Click here.]

Background

Under the federal Clean Water Act, it is unlawful to discharge a pollutant from a point source into a Water of the United States without obtaining a federal permit.  The question before the US Supreme Court is whether a permit is required when pollutants originate from a point source, but travel through a non-point source (groundwater) to reach the Water of the United States.  Put another way, the Court must decide whether an “indirect discharge” is within the scope of the Clean Water Act.

The Act defines the following terms:

• “Pollutant” is broadly defined as:   “dredged spoil, solid waste, incinerator residue, sewage, garbage, sewage sludge, munitions, chemical wastes, biological materials, radioactive materials, heat, wrecked or discarded equipment, rock, sand, cellar dirt and industrial, municipal, and agricultural waste discharged into water.”
• “Point source” is defined as “any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged. This term does not include agricultural stormwater discharges and return flows from irrigated agriculture.”
• “Discharge of a pollutant” means “(A) any addition of any pollutant to navigable waters from any point source, (B) any addition of any pollutant to the waters of the contiguous zone or the ocean from any point source other than a vessel or other floating craft.”

This case arose in Hawaii, where the County of Maui operates a wastewater reclamation facility on the island.  The facility collects sewage from surrounding areas, partially treats it, and then pumps the treated water (approximately 4 million gallons per day) through four disposal wells into the groundwater.  The wastewater travels through the groundwater approximately 1/2 mile to the Pacific Ocean. In 2012, several environmental groups filed suit against the County of Maui claiming these disposal wells were discharging a pollutant from a point source into a WOTUS without the required permit.

Litigation

The trial court sided with the environmental groups, finding that because the “path to the ocean is clearly ascertainable” the discharge from the disposal wells into the groundwater was “functionally one into navigable water.”  Thus, the court ruled a permit was necessary in this circumstance.  The County appealed.

The United States Court of Appeals for the Ninth Circuit affirmed, but did so applying a different standard.  There, the court held that a permit was required because the pollutants were “fairly traceable from the point source to a navigable water such that the discharge is the functional equivalent of a discharge into the navigable water.”  The County sought review from the United States Supreme Court, and their petition was granted.

The US Supreme Court heard oral arguments in this case last November, and several of my colleagues and I were lucky enough to attend.  To hear our thoughts after the argument, click here.

Majority Opinion

Justice Breyer delivered the Court’s Opinion and was joined in the majority by Justices Ginsburg, Kagan, Sotomayor, Roberts, and Kavanaugh.

The Opinion initially notes the linguistic question in the case is really the meaning of the word “from” as used in the statutory definition of “discharge of a pollutant:” “any addition of any pollutant to navigable waters from any point source.”

The Court Addresses the Parties’ Arguments

The Court then summarizes the arguments of the parties. The environmental groups essentially adopted the 9th Circuit “fairly traceable” test, arguing that if a point source discharge reaches a navigable water, even if it traveled “long and far through groundwater,” it would be subject to the Act’s requirements.  Conversely, the County argued for a bright-line “means of delivering pollutants” test whereby a pollutant is deemed “from” a point source only if that point source is “the last conveyance that conducted the pollutant to navigable waters.”  The Solicitor General, on behalf of the Environmental Protection Agency, argued that the release of pollutants into groundwater is not subject to the Clean Water Act, regardless of subsequent migrations into jurisdictional water.

The Court states the correct meaning of “from” lies somewhere in the middle of the parties’ approaches.  “We agree that the statutory context limits the reach of the statutory phrase ‘from any point source’ to a range of circumstances narrower than that which the Ninth Circuit’s interpretation suggests.  At the same time, it is significantly broader than the total exclusion of all discharges through groundwater described by Maui and the Solicitor General.”

In responding to the Ninth Circuit’s “fairly traceable” test, the Court notes that eventually virtually all water makes its way to a WOTUS and the power of modern technology allows tracing back over great distances, many years, and even in highly diluted forms. Interpreting “from” this broadly is inconsistent with the Clean Water Act’s purpose, the Court reasons, noting that under this test, even pollutants carried to WOTUS on a bird’s feathers or the 100-year migration of pollutants through 250 miles of groundwater could be jurisdictional. Additionally, the Clean Water Act intended that the responsibility for regulating groundwater and non-point source pollution be left to the states.  This, the Court reasons, indicates Congress did not intend such a broad definition of the word “from.” Legislative history also points to a narrower view of the Act as Congress expressly rejected requests to extend the permitting requirement to groundwater. Lastly, the Court notes that although the EPA has applied the permitting requirement to discharges that travel through groundwater, it has done so in a more limited fashion than the “fairly traceable” test, in particular rejecting application where there was a long time period between the discharge being made into the groundwater and reaching the WOTUS.

Next, the Court turns to the County’s arguments, deeming them “too narrow” and noting its proposed test could “risk serious interference with EPA’s ability to regulate ordinary point source discharges.”  The court referenced the hypothetical of a pipe spewing pollutants directly into coastal waters.  If the County’s test were adopted and any amount of groundwater between the pipe and the waters allowed the owner to avoid jurisdiction, why would he not move the end of the pipe back a few yards so that the pollution traveled through at least some groundwater to evade the permitting requirement?

Then, the Court addresses the Solicitor General’s arguments, which reflect the EPA’s recent Interpretive Statement that the Act excludes “all releases of pollutants to groundwater.”  The Court notes that neither party requested Chevron deference be given to this Interpretive Statement, but the Court does indicate it “pays particular attention to an agency’s views in light of the agency’s expertise in a given area, its knowledge gained through practical experience, and its familiarity with the interpretive demands of administrative need.”  Even with that attention, the Court found the EPA’s determination would “open a loophole allowing easy evasion of the statutory provision’s basic purposes.”

The Court Adopts “Functional Equivalent” Test 

The Court, instead, adopts a “functional equivalent” test.  “We hold that the statute 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.“  In other words, a permit is required when a “point source directly deposits pollutants into navigable waters, or when the discharge reaches the same result though roughly similar means.”

By way of example, the Court stated that “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.  If the 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 recognizes the difficulty with this approach being how to deal with the “middle instances.”  The Court identifies seven factors that could potentially be considered depending on the circumstances of the specific case: (1) transit time; (2) distance traveled; (3) the nature of the material through which the pollutant travels; (4) the extent to which the pollutant is diluted or chemically changes as it travels; (5) the amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source; (6) the manner by or area in which the pollutant enters the navigable waters; and (7) the degree to which the pollution (at that point) has maintained its specific identity.  The Court believes that time and distance will be the most important factors in most, but not necessarily all, cases.

The Court expects that the judiciary can provide guidance through decisions in individual cases, noting that those lower court decisions “should not create serious risks either of undermining state regulation of groundwater or of creating loopholes that undermine the statute’s basic federal regulatory objectives.”  The EPA can provide administrative guidance as well through its permitting options and general rulemaking.

Response to Dissenting Opinions

The Court also responds to criticisms contained in the dissenting opinions.

The majority believes that there is no linguistic basis to limit the word “from” to mean only the pollutant’s immediate origin. Justice Thomas argues that in a case of discharge through groundwater, the pollutants came from the groundwater.  The majority argues that does not mean it did not also come from the point source.   The Court offers an example of a traveler arriving at a hotel.  He came from a train station, from Baltimore, from Europe. He came from all three.  Thus, a sign instructing anyone arriving from Baltimore to speak to the desk clerk would include the traveler, even though he immediately came from the train station.  Additional examples involving gravy and baths are used to illustrate this principle as well.

Thus, the Ninth Circuit opinion was vacated, and the case remanded for further action consistent with this Opinion.

Concurring Opinion

Justice Kavanaugh issued a Concurrence where he highlighted three points.

First, he believes the Court’s interpretation and rejection of the parties’ approaches is consistent with the Scalia approach in the Rapanos case (prior Supreme Court case involving scope of “Waters of the United States”).

Second, he says that the statute does not establish a bright-line test regarding the meaning of “from” and the “source of the vagueness is Congress’ statutory text, not the Court’s opinion.”

Third, he responds to Justice Thomas’ criticism that the Court does not commit to which factors are the most important in determining “functional equivalent” by pointing to the Court’s statement that time and distance will likely be the most important factors in most cases.

Dissenting Opinions

There were two dissents in the case.

Thomas Dissent

Justice Thomas’ dissent was joined by Justice Gorsuch.  They would “adhere to the text” of the Clean Water Act and hold “that a permit is required only when a point source discharges pollutants directly into navigable waters.”  They believe the majority improperly “departs from the statutory text” by adopting the functional equivalent test.  He would reverse the judgment of the Ninth Circuit.

Thomas believes that the focus should not be on the word “from,” but instead on the word “addition,” which he believes “excludes anything other than a direct discharge.”  He writes that “addition” denotes an “augmentation or increase.”  Thus, “when a point source releases pollutants to groundwater, one would say that the groundwater has been augmented with pollutants from the point source.  If the pollutants eventually reach navigable waters, one would not naturally say that the navigable waters have been augmented with pollutants from the point source.  The augmentation instead occurs with pollutants from the groundwater.”

The prepositions “to’ and “from” reinforce this reading. When pollutants are released from a point source, they are released to the next source (such as groundwater) from the point source.  If the pollutants later make their way into a WOTUS, they are released from the groundwater to the WOTUS.  One would not naturally say pollutants were added to the navigable waters from the original point source.

The dissent also criticizes the majority’s test for “ultimately [doing] little to explaining how functionally equivalent an indirect discharge must be to require a permit.”  Thomas also notes that the idea that the EPA could clarify matters is unlikely because so far the EPA provided only limited guidance and recently changed its position, and he believes that the “general rules” the majority mentions are “constitutionally suspect.”

Lastly, Thomas and Gorsuch agree with the majority on several points. The dissenters agree that the 9th Circuit “fairly traceable” test is unsupportable.  They agree that the County and Justice Alito incorrectly read the word “any” into the text incorrectly.  Thomas and Gorcush also agree that the EPA’s opinion is not entitled to deference for two reasons: (1) The parties did not request it, and (2) EPA’s reading is not the best one. The dissent indicates that Chevron deference is likely unconstitutional.  Finally, the dissent agrees with the majority’s implied conclusion that Rapanos does not resolve this case as that opinion expressly did not address this issue.

Alito Dissent

Justice Alito’s first paragraph pulls no punches:  “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. ”

Alito believes that only two options exist. Either a pollutant that reaches the ocean would be understood to have come “from” a pipe if the pipe originally discharged the pollutant and it made its way to the ocean by flowing over or under the surface of the ground, or the pollutant that reaches the ocean should be understood to have come “from” the pipe only if it was discharged from the pipe directly into the ocean.  The court’s attempt to find a middle ground, he believes, is not plausible under the text and the test articulated has no clear meaning. He points to the problem with the majority’s traveler analogy, arguing it is unclear when one stops coming “from Europe” and instead comes from some geographic coordinates in the Atlantic Ocean.

Alito opines that entities like water treatment authorities need to know whether they must get a permit and should not be left with a “nebulous standard” from the Court.  “Functional equivalent” does not offer that certainty.  “Functional equivalent may have a quasi-technical ring, but what does it mean?”  Further, he states, “How the rule applies to ‘middle instances’ will be anybody’s guess.  Except in extreme cases, discharges will be able to argue that the Court’s multifactor test does not require a permit.  Opponents will be able to make the opposite argument.  Regulators will be able to justify whatever result they prefer in a particular case.  And judges will be left at sea.”

Alito also asserts that the “functional equivalent” test impinges on the State’s authority by expanding federal point source regulation at the expense of state non-point source regulation. The test also offends the “clear-statement rule” that Congress must speak clearly if it wishes to assign an agency decisions of vast economic and political significance.  By broadening the coverage of the Clean Water Act, Alito maintains, the “functional equivalent” test assigns this type of power to the EPA.

Justice Alito appears to agree with the majority that the tests advanced by the parties are too extreme.  He would interpret the words of the statute and reach the better of the two options, holding that “a permit is required when a pollutant is discharged directly from a point source to navigable waters.”   He would reverse and instruct the lower court to apply this test.