Splitting from Other Circuits, Sixth Circuit Limits the Scope of the Clean Water Act

This week, the Sixth Circuit diverged from the Fourth and Ninth Circuits by limiting the scope of the Clean Water Act (CWA) as it relates to groundwater. The court held that the CWA cannot regulate pollutants from point sources if they reach navigable waters through groundwater. This decision is a clear split from the Fourth and Ninth Circuits, who have both held this year that groundwater can be regulated under the CWA if it serves as a conduit for pollution that eventually reaches navigable waters, i.e., if a “direct hydrological connection” exists between the point source and navigable water.

The Sixth Circuit issued two rulings, one in Kentucky Waterways Alliance et al. v. Kentucky Utilities Co. and a second in Tennessee Clean Water Network et al. v. Tennessee Valley Authority. In both cases, the plaintiffs claimed that the defendants Kentucky Utilities Co. and Tennessee Valley Authority had violated the CWA where pollutants from their coal ash ponds had traveled through groundwater and polluted navigable waters. In deciding whether such groundwater was subject to the CWA, the Court did not adopt its sister circuits’ “direct hydrological connection” standard. Instead, it created a bright line rule: “[F]or a point source to discharge into navigable waters, it must dump directly into those navigable waters — the phrase ‘into’ leaves no room for intermediary mediums to carry the pollutants.” (Tennessee Clean Water decision containing same language here.)

The Fourth and Ninth Circuits have not adopted such a bright line rule. Earlier this year, in Upstate Forever v. Kinder Morgan Energy Partners LP, the Fourth Circuit sided with plaintiffs and held that groundwater is subject to the CWA’s permitting requirements. In that case, an underground pipe had ruptured and spilled petroleum into the groundwater, which then seeped into a nearby river, a federally protected navigable water. The court found that the groundwater was subject to the CWA with a limited qualification: “Although we conclude that an indirect discharge may fall within the scope of the CWA, such discharges must be sufficiently connected to navigable waters to be covered under the Act.”  A similar outcome was seen before the Ninth Circuit in Hawaii Wildlife Fund v. County of Maui. In that case, the state of Hawaii had disposed of its treated wastewater in injection wells that were close to the ocean. The wastewater eventually found its way to the ocean. In holding for the plaintiffs, the Ninth Circuit stated that if “the 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,” a National Pollutant Discharge Elimination System (NPDES) permit under the CWA was required.

However, the Ninth Circuit acknowledged the ambiguity inherent in the term “fairly traceable,” quoted above, stating that“[w]e leave for another day the task of determining when, if ever, the connection between a point source and a navigable water is too tenuous to support liability under the CWA.” Defendant, Hawaii’s Maui County, has petitioned the U.S. Supreme Court to review the Ninth Circuit’s holding, arguing that the ruling has wrongly expanded the reach of the CWA.

Given the circuit split, it seems inevitable that the U.S. Supreme Court will eventually be asked to review these decisions and resolve the conflicting holdings. Environmental groups will likely argue that the Sixth Circuit’s decision creates a loophole where polluters can avoid CWA liability by discharging their pollutants into groundwater, even if the groundwater reaches a protected water (as argued by the dissent in the Sixth Circuit decision).  However, the Fourth and Ninth Circuits’ decisions have raised legitimate concerns among the oil, gas, mining, and manufacturing sectors, as well as with states and municipalities; if the U.S. Supreme Court affirms the Fourth and Ninth Circuits’ interpretations of the CWA, these industries and government bodies will face increased costs in permitting, monitoring, and compliance costs, as well as increased exposure to liability. Under the CWA, fines can be as high as $53,484 per day for violations.  We’ll be tracking any developments.

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