Yesterday morning, the U.S. Supreme Court heard oral argument in a pair of cases—Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce—that by all accounts have the potential to result in a seismic shift in administrative and regulatory law, including changes for courts, the President and federal agencies, Congress, and the public.
The Clean Water Act does not cover groundwater. But what if an aquifer acts as a “conduit” to surface water? Is a facility liable if pollutants discharged into groundwater eventually flow into “waters of the United States,” which are covered under the act? Must facilities obtain permits in such circumstances?
The answer to these questions has been about as clear as mud. Practitioners are watching to see if the Supreme Court will take up the issue this term, to resolve a brewing circuit split, and if EPA and the Justice Department will finally clarify where the government stands.
The courts have been all over the map. For example, a recent Ninth Circuit case, County of Maui v. Hawaii Wildlife Fund, involved a locality-operated wastewater facility that used underground injection wells to dispose of treated sewage, where pollutants from the well seeped into the Pacific Ocean through groundwater. The court held that a National Pollutant Discharge Elimination System permit was required because the pollutants originated “from a point source” and “are fairly traceable from the point source to a navigable water.”
The Fourth Circuit followed suit in Kinder Morgan Energy Partners LP v. Upstate Forever, where a pipeline in South Carolina ruptured, leaking gasoline into groundwater, which later contaminated local streams. The court held that the “direct hydrological connection between groundwater and navigable waters” meant the discharge was regulated by the CWA.
The Sixth Circuit has taken the opposite tack in a pair of recent cases, including Kentucky Waterways Alliance v. Kentucky Utilities Co., which rejected a CWA citizen suit based on chemicals stored in a coal ash pond that allegedly traveled through groundwater to a nearby lake. Expressly disagreeing with its sister circuits, the appeals court ruled that the definition of “discharge” requires that a point source deliver pollutants directly to navigable waters.
Meanwhile, the government has sent mixed signals. In 2016, DOJ filed an amicus brief in the County of Maui case, supporting the district court’s finding of liability, albeit on a narrower theory. “It has been EPA’s longstanding position that discharges moving through groundwater to a jurisdictional surface water are subject to CWA permitting requirements,” but only “if there is a ‘direct hydrological connection’ between the groundwater and the surface water,” Justice lawyers told the court. The department advocated a case-by-case inquiry, recognizing that “some hydrological connections are too circuitous and attenuated to come under the CWA.”
The amicus brief would have required authorization from the solicitor general — entailing a rigorous review process — which meant the government’s position was now pretty well defined, right? Not so fast.
In February 2018, EPA published a notice soliciting input on whether it should continue to adhere to these views, in particular, on whether and to what extent “subjecting such releases to CWA permitting is consistent with the text, structure, and purpose of the CWA.” The agency said it would clarify its views through “memoranda, guidance, or in the form of rulemaking” to “provide additional certainty for the public and the regulated community.” But EPA has yet to act.
Fast forward to December. In response to petitions for certiorari filed in the Ninth and Fourth circuit cases, the Supreme Court issued a formal request for the views of the solicitor general, and, in an unusual move, ordered a response under a tight deadline, putting the government’s feet to the fire.
The United States submitted an amicus brief urging the Court to grant certiorari to decide “whether a ‘discharge of a pollutant,’ . . . occurs when a pollutant is released from a point source, travels through groundwater, and ultimately migrates to navigable waters.” Notably, however, the SG, keeping his cards close to the vest, was silent as to how EPA itself would answer that question. Rather, he reported that the agency would issue clarification “within the next several weeks.” The SG nonetheless declared a strong interest in resolving the matter, which “has the potential to affect federal, state, and tribal regulatory efforts in innumerable circumstances nationwide.”
Practitioners seeking to advise their clients are watching these developments closely. Will the Supreme Court agree to hear the case? Will EPA articulate its views, either through guidance or rulemaking, and if so, will it adhere to its Ninth Circuit arguments, flip positions, or land somewhere in between? And wherever the agency lands, will DOJ continue to argue that EPA’s interpretation is entitled to Chevron deference? Meanwhile, if the Supreme Court grants the case, practitioners will be looking for clues as to what kind of interpretive approach the justices might take if and when they have the chance to review the agency’s ongoing rule redefining “waters of the United States.”
Guidance needed for practitioners on some discharges to groundwater.
Before joining the Supreme Court, Neil Gorsuch made clear that he, like the justice he replaced, Antonin Scalia, believes in strict adherence to statutory text. According to Gorsuch, a judge’s personal policy preferences should play no role in statutory interpretation. And, going even further than Scalia, nominee Gorsuch admonished that judicial deference to agency construction of ambiguous statutory language under Chevron v. Natural Resources Defense Council amounts to an unconstitutional violation of separation of powers. An environmental case now pending before the Court on petition for a writ of certiorari, however, may well put Justice Gorsuch’s stated commitment to statutory text to the test.
At issue in the petition pending before the Court in New York vs. EPA is the validity of the agency’s so-called Water Transfer Rule, which provides that a movement from one navigable waterbody to an entirely distinct waterbody does not amount to an “addition of any pollutant to navigable waters” requiring a Clean Water Act Section 402 permit. Under this reading, EPA readily acknowledges, a person can discharge highly polluted water from one water body into a highly pristine separate water body without the need for a Section 402 permit.
EPA statutory grounding for the validity of the WTR is the Clean Water Act’s phrasing of the definition of “discharge of a pollutant” to mean “any addition of any pollutant to navigable waters.” EPA contends that the term “navigable waters” in this context treats all navigable waters in the nation as a “unitary” concept such that conveyances of pollutants from one navigable waterbody to another do not “add” pollutants to navigable waters overall. The pollutants are merely redistributed within the nation’s navigable waters.
The origins of EPA’s unitary waters theory can be found in an amicus brief filed by the solicitor general in the Supreme Court’s South Florida Water Management District vs. Miccosukee Tribe of Indians, decided in 2004. Relying on the notion that the Clean Water Act treated navigable waters as a unitary concept, the amicus brief argued for the first time that point sources that transfer water from one navigable waterbody to another distinct navigable waterbody do not require Section 402 permits even though the “point source . . . might be described as the ‘cause-in-fact’ of the release of pollutants into navigable waters.”
The reason for the solicitor general’s surprising filing at the time was clear. The federal government was concerned that a different rule might subject to Clean Water Act permitting requirements the routine transfers of water by federal agencies such as the Bureau of Reclamation or the U.S. Army Corps of Engineers between distinct bodies of navigable water. In this respect, the primary institutional motivation behind the interpretation appeared to derive from the concerns of those agencies rather than from EPA.
Both during the Miccosukee oral argument and in the opinion she wrote for the Court in the case, Justice Sandra Day O’Connor left little doubt of her skepticism of the validity of the solicitor general’s view. At oral argument, she described it as “an extreme position” that needed “a fall-back position,” generating courtroom laughter.
And in the opinion she went to great lengths to explain the many ways that such an interpretation could not be squared with the structure and operation of the Clean Water Act. The opinion emphasized in particular how the unitary waters theory conflicted with those parts of the statute that seek to protect “individual waterbodies as well as ‘waters of the United States’ as a whole.” The Court, however, declined ultimately to decide the issue because it had not been raised in or decided by the lower courts.
Notwithstanding the Miccosukee Court’s clear skepticism, EPA subsequently embraced the solicitor general’s unitary waters theory in a rulemaking that established the WTR, which exempts from Clean Water Act Section 402 permit requirements transfers of water (even if polluted) between distinct waterbodies. And, relying very heavily on Chevron deference, two federal courts of appeals have rejected challenges to EPA’s rule that argued that the rule cannot be squared with the act’s plain meaning and clear focus on individual waterbodies.
The state of New York’s pending petition in New York v. EPA asks the Supreme Court to review the issue. Should Gorsuch adhere to his view of both the conclusive role of statutory text and the impropriety of Chevron deference in judicial review of agency interpretation, there is good reason to expect he would support the WTR’s challengers on the merits. Yet, hailing from Colorado, where such water transfers are routine, the justice’s personal policy preferences are likely sympathetic to EPA’s contrary position.
How Justice Gorsuch votes on New York’s petition may well provide an early test of the strength of the justice’s stated convictions.
Justice Gorsuch faces a case where neither choice is entirely satisfactory.
HEADNOTE ❧ The Supreme Court’s decision in Chevron v. NRDC has been at the heart of environmental law and administration law generally. But even before the ascension of Neil Gorsuch to the High Court, there were signs that the justices were looking on deference with skepticism.
