Dissecting Discharges: Recent Ninth Circuit Rulings and EPA Guidelines Interpreting the Clean Water Act

November was an eventful month for the Clean Water Act (CWA). The Ninth Circuit Court of Appeals issued two decisions last month—which will apply to cases and matters in California and other states within the Ninth Circuit—clarifying the types of discharges that are subject to the United States Environmental Protection Agency’s (EPA) CWA Section 402 National Pollutant Discharge Elimination System (NPDES) permitting requirements. In addition, the EPA last month released its newly-proposed guidance on the application of the U.S. Supreme Court’s decision in County of Maui v. Hawaii Wildlife Fund to CWA permitting requirements for indirect discharges of pollutants to groundwater that find their way into surface waters that are also a “water of the United States” (Draft Guidance).

Comments on the EPA’s Draft Guidance are due next week on or before December 27, 2023. 

This alert provides an overview of each of these new developments. Please contact us or any member of the Land Use and Environmental & Natural Resources (LUENR) team if you have any questions or would like more information related to the CWA as it may apply to your facilities or projects.

ACTIVITIES THAT DISTURB STREAMBED MATERIALS MAY REQUIRE AN NPDES PERMIT

Section 402 of the CWA prohibits the discharge of any pollutant from a “point source” to navigable waters without an NPDES permit. In Idaho Conservation League v. Poe (9th Cir. 2023) 86 F.4th 1243, the main issue was whether the defendant’s suction dredge mining (a type of in-stream mineral mining that uses a pump to suck up streambed material, filters it for gold and other metals, and then discharges the processed sediment back into the water) was a discharge of pollutants into the river that required an NPDES permit under Section 402. The mining operator argued that Section 402 did not apply for two reasons: (1) his mining activities did not “add” pollutants to the river, and (2) even if it did, those pollutants should be treated as a discharge of “dredged material” that requires a CWA Section 404 permit from the United States Army Corps of Engineers (ACOE), not a Section 402 NPDES permit from the EPA. The Court rejected both arguments.

First, although the suction mining operations did not introduce any foreign materials or substances into the water, it included the excavation of existing rocks, gravel, sand, sediment, and silt through layers of riverbed down to the bedrock, which churned up materials that were not previously suspended in the water. The excavated materials were then processed through a sluice and the waste material was discharged into the water. In the court’s view, these activities amounted to an “addition” of pollutants within the scope of the EPA’s NPDES permitting program.

As to the second argument, the Court noted that there is no clear definition of “dredged material” or “discharge of dredged material” in either the CWA or related regulations, and therefore deferred to ACOE/EPA’s interpretation and application of those terms. The Court found evidence of long-standing policies between the two agencies that when materials are dredged from a waterbody and subsequently processed before being discharged, they are no longer treated as the discharge of dredged materials (under Section 404) but rather as the addition of pollutants regulated under Section 402. Because the mining operator’s activities filtered the dredged material before discharging back into the water, Section 402 applied and required an NPDES permit.

Conclusion: The Ninth Circuit’s decision in this case suggests that those who engage in dredging activities that also process the dredged material prior to discharge back into the watercourse could be required to seek an NPDES permit.

CLARIFICATION ON DIRECT V. INDIRECT DISCHARGES, AND NOTICE REQUIREMENTS UNDER THE CWA

In Cottonwood Environmental Law Center v. Edwards (9th Cir. 2023) 86 F.4th 1255, a Montana water district owned and operated a wastewater treatment facility, and used holding ponds to store treated water for part of the year. The ponds were lined and an “underdrain” pipe system was installed directly below to create “a preferential pathway” for groundwater to pass under the ponds and eventually to a river. During the irrigation season, a nearby golf course used the treated wastewater for irrigation purposes. It was undisputed that (1) the underdrain pipe was not connected to the ponds; (2) groundwater from the aquifer beneath the ponds would reach the river regardless of the existence of the underdrain pipe; (3) at least some water from the ponds leaked into the groundwater; and (4) water from the ponds and from the golf course irrigation also ultimately reach the river. Neither the water district nor the golf course had an NPDES permit covering their respective operations. The citizen suit alleged that both the water district and the golf course operator violated the CWA by discharging pollutants (i.e., the treated wastewater) to the river without an NPDES permit.

The main issue with regard to the water district was whether the plaintiff could proceed on a “direct” or “indirect discharge” theory. The distinction stems from the United States Supreme Court’s 2020 decision in County of Maui v. Hawaii Wildlife Fund, which held that discharges of pollutants into groundwater that eventually reach navigable waters may still require an NPDES permit if such indirect discharges are the “functional equivalent” of a direct discharge from a “point source” to navigable waters. Maui outlined seven potentially relevant factors for determining functional equivalence, including transit time and distance traveled. In this case, the plaintiff argued that the underdrain pipe was a point source that directly discharged pollutants from the ponds into the river, thus avoiding the Maui issue altogether. The Court disagreed.

Two factors were key to the Ninth Circuit’s conclusion. First, the plaintiff conceded that the underdrain pipe system was not connected to the holding ponds and therefore did not function as a direct water conveyance from the ponds to the river. Second, it was also undisputed that the groundwater and the river were hydrologically connected, meaning that the groundwater and the river were not “meaningfully distinct water bodies.” The Court reasoned that if the source water and the receiving water are hydrologically connected, then the transfer between them is not a discharge under the CWA. It therefore concluded that because groundwater in the aquifer would reach the river even in the absence of the underdrain pipe, the transfer of any pollutants caused by the underdrain pipe alone was not a discharge under the CWA. However, because the ponds leaked treated wastewater into the groundwater below the ponds that eventually flowed to the river, the plaintiff could proceed on a theory that the leakage caused an indirect discharge of pollutants under Maui. The Court also stated that the plaintiff was free to argue that the underdrain pipe contributed to that indirect discharge by affecting the transit time and other potentially relevant factors relevant to the “functional equivalent” standard.

The main issue with regard to the golf course was whether the plaintiff gave proper notice of its intention to sue in its “60-Day Notice” prior to filing its Complaint, as required under the CWA. The notice must provide information sufficient to allow the recipient to identify the alleged violation, and must be specific enough to provide an opportunity for the discharger to correct the problem. Here, the plaintiff gave timely notice to the golf course of an alleged CWA violation based on the golf course’s excessive irrigation practices using the treated wastewater on land directly above the same groundwater that reached the river. The Court held that the plaintiff’s notice was sufficient to put the golf course operator on notice of an indirect discharge theory of liability even though it also included direct discharge allegations that failed for similar reasons as those against the water district. The Court relied upon the fact that the notice specifically described how over-irrigating caused pollutants to reach the groundwater and the river, and also described applicable factors under Maui to support the functional equivalent of a direct discharge.

Conclusion: The Ninth Circuit’s decision helps to clarify the distinction between direct and indirect discharges, particularly when the path between the source of a pollutant and the navigable water is aided by subterranean infrastructure. The Court’s decision also sheds light on the information necessary to notify an alleged polluter of a potential indirect discharge claim against them.

THE EPA’S PROPOSED GUIDANCE ON INDIRECT DISCHARGES

The EPA issued its Draft Guidance on November 20, 2023, titled, Applying the Supreme Court’s County of Maui v. Hawaii Wildlife Fund Decision in the Clean Water Act Section 402 National Pollutant Discharge Elimination System Permit Program to Discharges through Groundwater. The Draft Guidance is intended to provide dischargers with guidance on how EPA will apply Maui’s “functional equivalent” standard and the sort of information that should be considered to determine which discharges to groundwater might require an NPDES permit. The Draft Guidance begins with a discussion of the Maui decision and details the seven factors that the Supreme Court identified as potentially relevant to establishing functional equivalency: (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 changed as it travels; (5) the amount of pollutant entering the navigable waters relative to the amount 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 has maintained its specific identity. The Draft Guidance then describes how groundwater dischargers and regulators can evaluate these and other factors to determine whether an NPDES permit is required.

The following are key elements of the EPA’s proposed instructions:

• Determine Connectivity: Dischargers should first evaluate whether their discharges to groundwater will reach navigable waters.
• Assess Functional Equivalency Using Factors in Maui and/or Other Factors: Dischargers must then assess whether discharging through groundwater is the functional equivalent of a direct discharge. Assessment will depend on site-specific features. The assessment may include, but is not limited to, analysis of the factors described in Maui. Other factors the EPA identified as potentially relevant include depth to groundwater, soil type, subsurface permeability, hydraulic conductivity, or the presence of one pollutant that is an indicator of another. The Draft Guidance notes that the factors in Maui should be treated as a non-exhaustive list of potentially relevant factors; although the analysis does not necessarily require consideration of all or even several of those factors. One factor that will not be relevant to the determination is the existence or lack of a state or local groundwater protection program. NPDES permit applicants will be required to provide an explanation of the factors and information used in their analysis with their applications.
• Time and Distance as Important Factors: Maui made clear that transit time and distance traveled will be the most important factors in most cases, but there is no bright-line test for evaluating jurisdiction using those factors; the factors will be evaluated on a site-specific basis. For instance, the Draft Guidance states that a discharge that is a long distance from a navigable water (i.e., a water of the United States) and takes a long time to reach it might not be the functional equivalent of a direct discharge. Conversely, it states that “a discharge that is a short distance from a water of the United States and that takes a short time to reach a water of the United States is likely the functional equivalent of a direct discharge.” Where time and distance are not dispositive, multiple other factors may provide evidence to support the functional equivalent determination.
• Procedures for Requesting an NPDES Permit:The EPA does not currently have a permit application form specific to discharges through groundwater. Applicants are advised to use existing forms and are encouraged to request a meeting with the permitting authority early in the process to identify supplemental information that may be required. The range of supplemental information that the permitting authority may require includes: (1) discharge locations; (2) estimated travel time from point source to surface water; (3) distance travelled; (4) flow rates and other flow characteristics; (5) shallow subsurface geology and hydrology characteristics; (6) a description of the pollutant-specific dynamics along the groundwater flow path; (7) any treatment technologies used; (8) an explanation of the permittee’s functional equivalent of a direct discharge analysis; and (9) any other information the permitting authority may require.

The EPA is currently seeking public comment on the Draft Guidance. Comments are due on or before December 27, 2023. Additional information and instructions for submitting comments are available on the EPA’s website.