Maui decision impacts reach the Mainland

The outcome of a case involving a 2014 leak from a Kinder Morgan Energy Partners gasoline pipeline in Belton, SC, remains in doubt after an April Supreme Court decision extending Federal Clean Water Action jurisdiction to discharges of pollutants that are the “functional equivalent” of a direct discharge to a Water of the United States. Early in July, Kinder Morgan and the Plaintiffs in its case sparred over whether the Plaintiffs could satisfy the “functional equivalent” test.

By way of background, this past April the Supreme Court held that the permitting requirements of the Clean Water Act, which traditionally have been applied to point-source discharges to surface water and wetlands, also apply to a discharge to groundwater when such a discharge is the “functional equivalent of a direct discharge." (Emphasis added. County of Maui, Hawaii v. Hawaii Wildlife Fund,  et al., April 23, 2020) The Court concluded that "an addition [of pollutants] falls within the statutory requirement that it be 'from any point source' when a point source directly deposits pollutants into navigable waters, or when the discharge reaches the same result through roughly similar means" [emphasis added].  Recognizing that the “functional equivalent” standard is amorphous, the Court cited seven factors to be considered by the courts, the Environmental Protection Agency (EPA), and the regulated community in applying the new standard in the future. These factors are:

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 of the pollutant that leaves the point source
6. The manner by or area in which the pollutant enters the navigable waters
7. The degree to which the pollution (at the point of discharge) has maintained its specific identity.

The Supreme Court did not clearly establish the outer limits of “functional equivalency.”   With respect to a hypothetical “pipe [that] ends 50 miles from navigable waters and . . . emits pollutants that travel with groundwater, mix with much other material, and end up in navigable waters only many years later,” the Court would say only that the permit requirements of the Federal Clean Water Act “likely do not apply.” On the other hand, if a discharge from a point source occurs very near (but not directly into) a navigable water and ends up there via groundwater migration, the discharger faces staggering penalties for not having a federal NPDES permit (NPDES) that EPA is unlikely to issue.

In the recent Kinder Morgan decision, the Maui decision was cited by the plaintiffs alleging releases from a ruptured (now repaired and non-leaking) pipeline that resulted in impacts on an adjacent river via groundwater allegedly violating the Clean Water Act (Upstate Forever v. Kinder Morgan Energy, 887 F.3d 637 (4th Cir. 2018)). The District Court in that case ruled that the definition of “discharge of pollutant” does not place temporal conditions on the discharge from a point source, and that the migration of pollutants to the adjacent river without a permit constitutes a violation of the Clean Water Act. The Supreme Court vacated that decision and returned the case to the District Court for reconsideration in light of the new “functional equivalent” test. 

The Maui decision will, as the Supreme Court recognized, lead to more litigation over the reach of the Federal Clean Water Act, and the outcomes of those cases will rely on opinions by experts regarding the application of the factors identified by the Court as relevant to “functional equivalence.” The regulated community would do well to keep these factors in mind when making decisions regarding facility design and maintenance.

The authors of this article appreciate contributions by Jeff Porter, Chair of the Environmental Practice at Mintz.