Uncharted Waters: Navigating the Supreme Court’s New Clean Water Act Permitting Test

Uncharted Waters: Navigating the Supreme Court’s New Clean Water Act Permitting Test

Legal Sidebari
Uncharted Waters: Navigating the Supreme
Court’s New Clean Water Act Permitting Test
July 30, 2020
The U.S. Environmental Protection Agency (EPA) continues to grapple with how to implement the
Supreme Court’s April 2020 decision in County of Maui v. Hawaii Wildlife Fund. Maui introduced a new
multi-factor test for determining whether the Clean Water Act (CWA) applies to pollutant discharges that
migrate through groundwater to navigable surface waters. The Maui Court rejected EPA’s 2019
interpretive guidance that categorical y excluded point source pollutant discharges to groundwater from
the CWA permitting program. In a 6-3 ruling, the Supreme Court held that the CWA requires a permit for
a direct discharge or the “functional equivalent of a direct discharge” of pollutants from a point source
into navigable waters.
EPA has not formal y responded to Maui through the issuance of guidance or regulations. Absent such a
response or legislative action, regulated entities, state agencies, and federal courts are tasked with
clarifying and applying the Court’s “functional equivalent” test. This Sidebar discusses the Maui decision
and highlights its potential effects on current and future litigation over the scope of CWA jurisdiction over
what qualifies as a “functional equivalent” of a direct discharge of pollutants into navigable waters.
The CWA’s Permitting Requirements
The Federal Water Pollution Control Act, commonly referred to as the Clean Water Act (CWA), prohibits
any “discharge” or “addition” “of any pollutant” “to navigable waters” “from any point source” without a
permit. The CWA defines “pollutant” broadly to include toxins such as “sewage” and “radioactive waste,”
as wel as more common elements such as “rock, sand, cel ar dirt,” and “heat.” The act defines navigable
waters as “waters of the United States” and a “point source” as ‘‘any discernible, confined and discrete
conveyance, including . . . any pipe, ditch, channel, [or] tunnel.”
The CWA al ows certain discharges of point source pollutants if authorized by a CWA permit issued under
the National Pollutant Discharge Elimination System (NPDES). CWA Section 402 requires point source
dischargers to obtain NPDES permits, which set pollution limits—known as effluent limits—on the type
and quantity of pollutants that dischargers can release into navigable waters.
The CWA does not require NPDES permits for nonpoint source discharges. Nonpoint source pollution is
regulated through state programs under CWA Section 319 and other state and federal laws. If EPA
Congressional Research Service
https://crsreports.congress.gov
LSB10528
CRS Legal Sidebar
Prepared for Members and
Committees of Congress

Congressional Research Service
2
approves a state’s nonpoint source management program, the state may apply for grant money to support,
among other things, nonpoint source and groundwater pollution control activities and demonstration
projects. Under CWA Section 402(b), Congress al ows EPA to authorize a state to administer its own
NPDES permit program if the Agency determines that the state program meets certain statutory criteria.
EPA has authorized nearly al states to implement al or part of the NPDES program. EPA retains
oversight over delegated programs and NPDES authority for non-delegated states, territories, and tribes,
as wel as the program components for which a state is not authorized to implement.
Background on the Maui Litigation
CWA Section 505 grants “citizens” the right to bring civil actions against any person that al egedly
violates effluent standards or limitations. Various citizen suits, including County of Maui v. Hawaii
Wildlife, have sought to apply NPDES permitting requirements to point source pollutant discharges that
migrate through groundwater to navigable waters.
In the Maui case, the County of Maui’s (County’s) Lahaina Wastewater Reclamation Facility discharged
treated sewage into underground injection wel s. EPA, the Hawai’i Department of Health, and others
conducted a tracer dye study in which they injected a dye into the wel s to see if and when the dye would
appear in the ocean. The study concluded that 64% of the wel s’ treated sewage effluent migrated through
groundwater to the Pacific Ocean. While conceding that the wel s were point sources, the County argued
that the point source must “convey the pollutants directly into the navigable water” to be regulated under
the CWA. Because the wel s discharged to the Pacific Ocean via groundwater, the County contended that
it was not a point source discharger required to obtain an NPDES permit under Section 402 the CWA.
The U.S. Court of Appeals for the Ninth Circuit (Ninth Circuit) disagreed, affirming the district court’s
summary judgment that the County had violated the CWA by discharging pollutants without an NPDES
permit. The Ninth Circuit concluded that the pollutants were “fairly traceable” from the point source
(wel s) to navigable waters such that the discharge through groundwater was the “functional equivalent of
a discharge into navigable waters.” In 2019, the Supreme Court granted review of the Ninth Circuit’s
decision to determine “whether the CWA requires a permit when pollutants originate from a point source
but are conveyed to navigable waters by a nonpoint source, such as groundwater.”
Supreme Court Maui Decision
In a 6-3 ruling, the Supreme Court vacated the Ninth Circuit decision, rejecting the “fairly traceable”
permitting test as wel as other tests proposed by litigants and the government to determine whether an
indirect discharge to navigable waters requires a CWA permit. Justice Breyer delivered the opinion of
Court, joined by Chief Justice Roberts and Justices Ginsburg, Sotomayor, Kagan, and Kavanaugh. In his
majority opinion, Justice Breyer relied on the CWA’s statutory context and purpose of the statutory phrase
“from any point source” to strike a middle ground between the Ninth Circuit’s “fairly traceable”
interpretation and the total exclusion of al discharges through groundwater proposed by the County, the
federal government, and dissents from Justices Thomas and Alito.
The majority concluded that the various interpretations of the CWA’s permitting applicability were
inconsistent with Congress’s intent to provide sufficient federal authority to regulate discharges of
“identifiable sources” of pollutants into navigable waters while preserving the states’ authority over
groundwater discharges. The majority rejected the Ninth Circuit’s and the environmental groups’ “fairly
traceable” standard, reasoning that such a broad interpretation would require a NPDES permit for highly
diluted discharges that reach navigable waters many years after their release from the point source. At the
same time, the majority refused to adopt the County’s and the federal government’s narrow interpretation
categorical y precluding CWA jurisdiction over discharges to groundwater. That interpretation, the

Congressional Research Service
3
majority reasoned, would open a “massive loophole in the permitting regime” by al owing point sources
to discharge pollutants into groundwater a short distance from navigable waters without a permit.
To bridge these “extreme” interpretations, the majority created a new test for determining, on a case-by-
case basis, when a discharge requires a CWA permit and outlined various factors to consider in making
such decisions. The majority held that the CWA requires a NPDES permit for a direct discharge of
pollutants or the “functional equivalent” of a direct discharge from a point source of pollution into
navigable waters. The majority explained that “[w]hether pollutants that arrive at navigable waters after
traveling through groundwater are ‘from’ a point source depends upon how similar to (or different from)
the particular discharge is to a direct discharge.” While rejecting the Ninth Circuit’s “fairly traceable”
standard, the majority appeared to echo the Ninth Circuit’s view that such discharges must be “the
functional equivalent” of a discharge directly into navigable waters.
The majority acknowledged that “a more absolute position . . . may be easier to administer” than the
“functional equivalent” test but noted that “there are too many potential y relevant factors applicable to
factual y different cases . . . to use more specific language.” The majority highlighted that the two “most
important factors” in making a functional equivalent determination wil likely be (1) the distance
pollution must travel to reach navigable waters, and (2) pollutant transit time to navigable waters.
However, the court noted that, depending on the circumstances, other
factorshttps://www.supremecourt.gov/opinions/19pdf/18-260_jifl.pdf - page=20 may need to be
considered, including the material the pollutant travels through, dilution or chemical changes to the
pollutant as it travels, the amount of the pollutant entering the navigable waters, how and where the
pollutant enters the navigable waters, and the degree to which the pollution has “maintained its specific
identity” at the point it enters navigable waters.
For further guidance in administering the new test, the majority pointed to the courts and EPA. For
example, the majority noted that the courts can “provide guidance through decisions in individual cases,”
and EPA can “provide administrative guidance (within statutory boundaries),” through permits or “general
rules.” To address concerns that such a test could greatly expand permitting requirements, the majority
noted that EPA has been administering this permitting provision “for over 30 years . . . [and] we have seen
no evidence of unmanageable expansion” and that various permitting techniques (e.g., issuing a CWA
general permit for a category of dischargers) and the courts’ discretion in applying the CWA’s penalty
provisions can be used to assuage such concerns. The Court remanded the case to the Ninth Circuit to
determine whether the Lahaina Wastewater Reclamation Facility needs a NPDES permit under the new
“functional equivalent” test.
Justice Kavanaugh joined the court’s opinion “in full,” emphasizing in his concurrence that the majority’s
interpretation adheres to Justice Scalia’s plurality opinion in Rapanos v. United States, which noted that
indirect discharges are not exempt from the CWA’s permitting requirements. Justice Thomas dissented,
joined by Justice Gorsuch, and Justice Alito issued his own dissent. Both dissents would require a permit
only “when a point source discharges pollutants directly into navigable waters” and identified the
“practical problems” in implementing the majority’s “functional equivalent” test. Justice Alito also
criticized the majority’s test as “a rule that provides no clear guidance and invites arbitrary and
inconsistent application.”
Implementing the “Functional Equivalent” Test
In the aftermath of Maui, EPA, states, regulated entities, and the courts are faced with interpreting,
implementing, and enforcing the “functional equivalent” test for indirect point source discharges. EPA is
reviewing options on implementing the new test, including conducting a rulemaking or revising previous
guidance. At a congressional oversight hearing in May 2020, the EPA Administrator testified that the test
may be “difficult” to implement and is trying to determine if the agency needs to reissue guidance. In the

Congressional Research Service
4
Maui decision, the Supreme Court did not defer to and ultimately rejected EPA’s 2019 interpretive
guidance that categorical y excluded indirect discharges from the CWA permitting program.
Without guidance from EPA, regulated entities and states with delegated authority to issue NPDES
permits wil use the “functional equivalent” test to determine whether a point source needs a permit for an
indirect discharge. For example, under the new test, some commentators believe that previously
unpermitted point sources such as underground injection wel s, septic systems, and waste ponds may need
NPDES permits to comply with the CWA. Because EPA has delegated NPDES permitting authority to
nearly al states, point sources wil likely seek guidance from their state permitting agency regarding
compliance with the Maui decision.
Meanwhile, the litigants in Maui and other ongoing CWA indirect discharge cases are applying the
functional equivalent test to their specific circumstances, which may establish precedent for future cases
and permitting decisions. The Ninth Circuit remanded the Maui case to the federal district court in
Hawai , which previously held that the County’s discharge was subject to NPDES permitting
requirements. Now, the district court wil have to decide whether the discharge from the County’s
wastewater treatment facility needs a NPDES permit under “the functional equivalent” test. In an effort to
supplement the record, the County has asked the district court for more discovery to address the various
factors outlined by the Supreme Court.
Other federal appel ate courts may soon apply the new “functional equivalent” test to indirect pollutant
discharges in different contexts. In light of Maui, the Supreme Court vacated and remanded the U.S.
Court of Appeals for the Fourth Circuit’s decision in Upstate Forever v. Kinder Morgan that had held that
the gasoline discharges from a ruptured pipeline into groundwater violated the CWA because there was a
“direct hydrologic connection” between the polluted groundwater and navigable waters. In addition, the
U.S. Court of Appeals for the Seventh Circuit may apply the “functional equivalent” test in Prairie Rivers
Network v. Dynegy Midwest Generation, which involves a district court decision dismissing the plaintiff’s
al egations that a retired coal power plant violated the CWA when pollutants from coal ash storage ponds
leaked into groundwater and reached navigable waters. These cases may rely on new technical data that
consider Maui’s “functional equivalent” factors and may need to address how to apply permitting
requirements for a potential pipeline break or other unforeseeable discharges.
Many stakeholders agree that the “functional equivalent” test wil likely increase litigation and may result
in a patchwork of conflicting judicial decisions that fail to provide consistent guidance to the states or
regulated entities. Other stakeholders fear that new test wil lead to years of litigation over the meaning of
a “functional equivalent” discharge similar to the prolonged litigation and uncertainty that resulted from
the Supreme Court’s 2006 case, Rapanos v. United States. In Rapanos, the justices split 4-4-1 on the
proper test for determining which surface waters qualify as “waters of the United States” subject to the
CWA. Fourteen years after Rapanos, EPA and stakeholders continue to litigate and debate the scope of the
CWA’s jurisdiction over “waters of the United States.”
Considerations for Congress
Congress could consider legislative options to clarify the scope of CWA jurisdiction over indirect
pol utant discharges or direct EPA to report to Congress on related actions or interpretations as it
has done in the past. For example, in March 2018, the House and Senate Appropriations
Committees’ explanatory statement for the Consolidated Appropriations Act of 2018
“encourage[d] the [EPA] to consider whether it is appropriate to promulgate a rule to clarify that
releases of pol utants through groundwater are not subject to regulation as point sources under
the CWA.” The Committees directed EPA to brief the Committees about its findings and any
plans for future rulemaking. In April 2019, EPA issued its guidance providing its interpretation

Congressional Research Service
5
that point source pol utant discharges to groundwater were not subject to the CWA. However, a
year later, the Supreme Court rejected EPA’s interpretation in Maui.

Author Information

Linda Tsang

Legislative Attorney

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

LSB10528 · VERSION 1 · NEW