Decision concludes a permit is required if such discharges are the “functional equivalent” of a direct discharge to navigable waters.

By Janice Schneider, Maria Hoye, and Ethan Prall

On April 23, 2020, the Supreme Court of the United States issued an opinion in County of Maui, Hawai’i v. Hawai’i Wildlife Fund, holding that the Clean Water Act (CWA) requires a permit for certain discharges through groundwater. Specifically, a permit is required if there is a “direct discharge” from a point source to navigable waters, or if a given discharge is the “functional equivalent” of a direct discharge when that discharge passes through groundwater before reaching navigable waters.[1]

In establishing this new functional equivalence test, the Court rejected both the argument that allowing any regulation of discharges through groundwater would expand the CWA’s scope without warrant, and the contrary argument that every discharge that is “fairly traceable” from a point of discharge to navigable waters must be regulated under the CWA. When applying the test, the Court explained that several factors — most centrally, time and distance — are relevant to determining whether a discharge through groundwater is the functional equivalent of a direct discharge.

Case background

The petitioner in County of Maui operates a wastewater reclamation facility, which injects millions of gallons of wastewater each day through wells located hundreds of feet underground. The wastewater from this facility then travels about a half mile through groundwater to the ocean. Environmental groups brought suit in 2012 alleging that the county was discharging pollutants into the ocean without a National Pollution Discharge Elimination System (NPDES) permit, in violation of the CWA.

The CWA prohibits the “discharge of a pollutant,” which means “any addition of any pollutant to navigable waters from any point source,” without an NPDES permit. Under the CWA, a “point source” is defined as any “discernible, confined and discrete conveyance,” including, for example, any container, pipe, ditch, channel, tunnel, conduit, or well. The issue in the case thus was whether the wastewater injection constitutes a discharge of a pollutant “from” a point source requiring a permit under the CWA, even when it travels through groundwater before reaching the ocean.

In the underlying decision, the US Ninth Circuit Court of Appeals concluded that the CWA requires a permit for discharges of pollutants that pass through groundwater, as long as those discharges are “fairly traceable” from the point source to navigable water. The Supreme Court granted the County of Maui’s petition for certiorari to resolve a circuit split. In a similar case, the Fourth Circuit had reached the same conclusion as the Ninth Circuit by applying a different test once used by the US Environmental Protection Agency (EPA), holding that there must be a “direct hydrological connection” between the groundwater and the navigable water to regulate the discharge. And in yet another case, the Sixth Circuit arrived at the opposite conclusion from the Ninth and Fourth Circuits, holding that discharges passing through groundwater simply are not covered by the CWA.[2]

In its petition, the county argued — consistent with EPA’s recent view and supported by a Solicitor General brief — that the CWA only covers discharges from a point source (like a pipe) passing directly into navigable waters, a so-called “direct discharge.” The environmental groups challenged this view on appeal, agreeing with the Ninth Circuit that any discharge that is “fairly traceable” to a point source must be regulated under the CWA, even if the discharge passes through groundwater.

The Court’s decision

The Court charted a middle path between the parties’ arguments, concluding that “in light of the statute’s language, structure, and purposes, the interpretations offered … are too extreme.” The Court rejected the view that any discharge “fairly traceable” from a point source is covered, noting that view could expand the CWA’s permit requirement to even discharges that reach surface waters many years later over great distances. The Court also rejected the contrary contention that the CWA does not apply to any discharges that pass through groundwater, noting that would create an “obvious loophole” if polluters simply moved their pipes back from a surface water in order to discharge through a short stretch of groundwater.

Instead, the Court held that a discharge passing through groundwater requires a permit under the CWA if that discharge is the “functional equivalent” of a direct discharge into navigable waters. In charting this middle path, the Court explained that EPA has been exercising jurisdiction over some groundwater discharges for decades without creating unmanageable requirements, for example by issuing general permits.

In response to dissents by three Justices, the majority acknowledged that this approach does not create a bright-line rule and explained that “time and distance” will be the most important factors in most cases to determine whether a discharge through groundwater is the functional equivalent of a direct discharge. Other factors may include:

  • The material through which the pollutant travels
  • The extent to which the pollutant is diluted or chemically altered
  • The relative amount of pollutant entering the navigable water compared to the amount leaving the point source
  • How the pollutant enters the navigable water
  • The degree to which the pollutant maintains its specific identity

The Court remanded the case to the Ninth Circuit to apply the functional equivalent standard on the facts.

The Supreme Court’s decision provides important guidance on the scope of groundwater discharges covered by the CWA, and the Ninth Circuit’s application of the functional equivalence test will be important to follow.

Latham & Watkins’ Environment, Land & Resources lawyers will continue to track and report on developments related to this case and other cases involving groundwater discharge.

[1] County of Maui, Hawai’i v. Hawai’i Wildlife Fund, No. 18-260, slip op. at 1 (April 23, 2020).

[2] See Hawai’i Wildlife Fund v. County of Maui, 886 F. 3d 737 (9th Cir. 2018); Upstate Forever v. Kinder Morgan Energy Partners, L. P., 887 F. 3d 637 (4th Cir. 2018); Kentucky Waterways Alliance v. Kentucky Util. Co., 905 F. 3d 925 (6th Cir. 2018).