On December 8, the United States Environmental Protection Agency (EPA or the Agency) issued draft guidance to clarify the application of the “functional equivalent” test created by the United States Supreme Court in County of Maui v. Hawaii Wildlife Foundation, 140 S. Ct. 1462 (2020). The guidance is intended to help both members of the regulated community and permitting authorities determine when a National Pollutant Discharge Elimination System (NPDES) permit may be required for discharges from point sources that reach navigable waters through groundwater. Comments on the draft guidance are due 30 days after its publication in the Federal Register.

In Maui, the Supreme Court considered whether Section 402 of the Clean Water Act required an NPDES permit for the release of pollutants from a point source that reached jurisdictional waters after traveling through groundwater. 140 S. Ct. at 1468. The Court held that an NPDES permit would be required only when a discharge from a point source that reaches jurisdictional waters through groundwater is the “functional equivalent” of a direct discharge from a point source into navigable waters. Id. To determine whether a discharge is the “functional equivalent” of a direct discharge from a point source, the Court outlined seven non-exhaustive factors that should be applied on a case-by-case basis. Id. at 1476-77. The factors relevant to this analysis include:

  • transit time that it takes for the pollutant to reach the navigable waters;
  • distance traveled by the pollutant;
  • the nature of the material through which the pollutant travels;
  • the extent to which the pollutant is diluted or chemically changed as it travels;
  • the amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source;
  • the manner by or area in which the pollutant enters the navigable waters; and
  • the degree to which the pollutant has maintained its specific identity as it moved from the point source to the navigable waters.

Id. A more in-depth discussion of Maui can be found here.

After Maui, the EPA acknowledges that members of the regulated community and permitting authorities may have questions related to “whether and when to obtain permit coverage, particularly given the uncertainties associated with the Court’s fact-specific, multi-factor” analysis. The EPA’s new guidance seeks to clarify how this newly created test fits within the traditional framework of the NPDES program and how the “functional equivalent” analysis should be applied in permitting decisions.

As an initial matter, EPA reiterates that the Maui decision did not change the basic framework for determining when a NPDES is required under the Clean Water Act. According to the guidance, there continues to be two threshold requirements for determining whether an NPDES permit is required: (1) there must be an actual discharge of a pollutant to Waters of the United States (as defined by the Clean Water Act); and (2) the discharge must be from a point source. Notably, with respect to the first requirement, the Agency reiterates that there continues to be no obligation under the Clean Water Act “to prove the absence of a discharge.”

According to the guidance, the “functional equivalent” analysis should only be conducted after these two conditions are satisfied. When conducting that analysis, the guidance indicates that all of the factors identified by the Supreme Court in Maui are likely relevant considerations. If these factors suggest that “the pollutant composition or concentration that ultimately reaches a water of the United States is different from the composition or concentration of the pollutant as initially discharged,” it is less likely to be the functional equivalent of a direct discharge. But if a discharge reaches a water of the United States “in the same or nearly the same chemical composition or concentration[,]” the functional equivalence test might be met.

According to the Agency, the regulated community and permitting authorities should also consider “the design and performance of the system or facility from which the pollutant is released.” In the EPA’s view, “[t]he design and performance of a system or facility can affect or inform all seven factors identified in Maui.” For example, a system might be designed so that a pollutant may have to travel a great distance before reaching navigable waters, or it might “promote dilution, adsorption or dispersion of the pollutant,” thereby making it less like a direct discharge. Under the EPA’s guidance, this design element should be considered when determining whether the discharge can be considered the “functional equivalent” of a direct discharge under Maui.

In its guidance, EPA indicates that it “anticipates that the issuance of [NPDES] permits [based on discharges that move through groundwater] will continue to be a small percentage of the overall number of NPDES permits issued following application of the Supreme Court’s ‘functional equivalent’ analysis.” However, the responsibility and obligation to obtain an NPDES permit continues to lie with facility owners and operators and those owners and operators that fail to seek a permit for discharges that are found to be the “functional equivalent” of direct discharges may be subject to penalty under the Clean Water Act. As a result, members of the regulated community should evaluate whether they need to apply for an NPDES permit based on the EPA’s new guidance. This analysis should include a particular focus on the design and performance of the relevant system or facility and how those design and performance elements impact the seven factors identified in Maui.

There is some uncertainty as to how this new guidance document will be used once the Biden administration begins to implement its policy initiatives at the EPA. Given that the guidance document is well-grounded in the Supreme Court’s Maui decision and provides clear reasoning for its analysis, we expect that this guidance document, if finalized, will prove useful for both members of the regulated community and permitting authorities.

For more information about the Clean Water Act, Maui, or the EPA’s new guidance, please contact Brooks Smith, Greg Blount, or Houston Shaner.