SCOTUS Creates “Functional Equivalent” Test to Determine Whether Point Source Dischargers Are Subject to the Clean Water Act

The U.S. Supreme Court recently handed down a decision in the most prominent Clean Water Act (CWA) case since its 2006 plurality decision in Rapanos v. United States. In County of Maui v. Hawaii Wildlife Fund, the Court interpreted the landmark statute to require a permit where there is a “functional equivalent” of a direct discharge from a “point source” into “navigable waters.” The likely impact of this holding for the parties is to subject the County of Maui to the statute’s permitting requirements for its discharges of treated wastewater through wells to groundwater that eventually reach the ocean. Beyond the parties, environmental groups are likely to cheer this decision while the regulated community, and lower courts, will likely be wary of the Court’s multifactor test.

The CWA prohibits the “addition” of any pollutant from a “point source” to “navigable waters” without a permit from the Environmental Protection Agency (EPA). The County of Maui came before the Court as the operator of a wastewater reclamation facility in Maui, Hawaii. That facility collects sewage, partially treats it, then pumps that water into four underground wells. The effluent then travels about a half mile through groundwater to the Pacific Ocean. For nearly five decades the facility operated in this manner with the knowledge of the EPA, and the Hawaii Department of Health (HDOH). However, neither the EPA nor the HDOH required a permit. In 2012, Hawaii Wildlife Fund and other environmental groups brought a citizens’ suit under the CWA against Maui, claiming that the County was illegally discharging to the Pacific Ocean without a permit.

The District Court granted summary judgment in the environmental groups’ favor, determining that the CWA required a permit where “the path to the ocean is clearly ascertainable” and the discharge was “functionally one into navigable water.” The Ninth Circuit agreed that a permit is required in Maui’s case, and amended the standard, stating that a permit is required where “pollutants are 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.”

Maui argued that the language of the statute creates a “bright-line test” under which a point source must be the means of delivery of pollutants to navigable waters. The Solicitor General, as amicus curiae, took a similar position, arguing that a permit is not required where pollutants are released from a point source to groundwater, which is neither a point source nor navigable waters, even if the pollutants subsequently migrate to navigable waters. The environmental groups argued that so long as a release from a point source is a “proximate cause” of a discharge to navigable waters, a permit is required under the Act. The Court did not fully accept any of these proposed standards.

Instead, in a majority opinion authored by Justice Breyer (who was joined by Chief Justice Roberts and Justices Ginsberg, Kagan, Sotomayor, and Kavanaugh), the Court held that a permit is required where there is a “functional equivalent of a direct discharge” from a point source, and, recognizing the “difficulty with this approach” to “clearly explain how to deal with middle instances,” provided a non-exhaustive list of factors that may be considered in such instances: (1) transit time; (2) distance traveled; (3) the nature of the materials through which the pollutant travels; (4) the extent to which the pollutant is diluted or chemically changed; (5) the amount of pollutant released from the point source that reaches the navigable waters; (6) the manner by or area in which the pollutant enters the navigable waters; and (7) the degree to which the pollutant has maintained its specific identity. According to the Court, “[t]ime and distance will be the most important factors in most cases, but not necessarily in every case.” Justice Kavanaugh also added a brief concurrence. Justice Thomas, joined by Justice Gorsuch, dissented, arguing that the Court departed from the statutory text in reaching its holding and creating the “functional equivalent” standard. Justice Alito added a second dissenting opinion, arguing further that the Court has entered into the arena of rulemaking, and in doing so has adopted a rule “that provides no clear guidance and invites arbitrary and inconsistent application.”

Environmental advocacy groups are sure to be pleased with this outcome. The County of Maui will likely have to obtain a permit from the EPA or cease discharging pollutants into groundwater that flows to the Pacific Ocean. Further, the Court made it clear that dischargers cannot avoid the reach of the CWA by releasing pollutants from a point source to a non-point source that leads to navigable waters in a manner that is deemed the “functional equivalent of a direct discharge.” However, the regulated community and lower courts across the country may struggle to make sense of this nebulous standard.