September 30, 2022

Taking Bets: The Supreme Court Is Just About to Split NPDES and Section 404 Permitting Under the Clean Water Act

Posted on September 30, 2022 by Robin Kundis Craig

The first Monday in October is just around the corner, and the first oral argument on the Supreme Court’s agenda is Sackett v. EPA. The Supreme Court is stepping once more into Clean Water Act “waters of the United States,” more popularly known as WOTUS.

If you’re a Clean Water Act wonk, there may be a little voice in the back of your head yelling, “Theeeey’re baaack!” Yep, it’s those Sacketts—the ones who went to the Supreme Court the first time in 2012 to argue that Clean Water Act jurisdictional determinations (usually, as here, regarding whether wetlands are “waters of the United States”) are final agency actions that can be immediately appealed. They won that one, with the late Justice Scalia writing the opinion for a unanimous Court.

This time, they’ve teed up the Court to finally resolve the Court’s own fractured opinion from its 2006 decision in Rapanos v. United States. If it’s been a while, the Rapanos Court fractured 4-1-4 on the proper test to determine whether waters that aren’t actually navigable are subject to the Clean Water Act. Justice Scalia and the plurality said that there had to be a direct surface water connection to traditionally navigable waters. Justice Kennedy (by himself) created the significant nexus test, looking for a hydrological connection such that polluting the smaller waterbody could affect a traditionally navigable water. Justice Stevens and the other dissenters wanted a broader test but went with jurisdiction if either of the Scalia or Kennedy tests were met.

Sixteen years of fairly ugly legal history and propaganda ensued. The result to date is two failed rulemakings and an unresolved circuit split, with no help from Congress.

Since at least 2001, the Supreme Court has made it pretty clear that it finds the Clean Water Act’s Section 404 “dredge and fill” permit program distasteful. It interferes with the development of private property by limiting what landowners can do with wetlands and other soggy patches on their properties. It threatens states’ traditional authority over land use planning. The agencies (EPA and the Army Corps) need to be reined in.

Conversely, the Supreme Court loves the Section 402 National Pollutant Elimination Discharge System (NPDES) permit program. Indeed, Justice Scalia took a break from his withering criticism in Rapanos of Section 404 to argue that his test wouldn’t affect the NPDES permit program, because fill material stays in place while other pollutants flow to larger waters. (Okay, whether he had ever watched a dredging and filling operation remains an open question. The point is, even Justice Scalia wanted to preserve the NPDES program.) If we had any doubts about the Court’s feeling about NPDES permits, it gifted us in 2020 with the County of Maui v. Hawai’i Wildlife Fund decision, creating the “functional equivalent” test to capture all those polluters who use a less-than-direct route—say, by discharging into groundwater—to send their wastes to waters of the United States.

The fundamental problem confronting the Supreme Court regarding these conflicting feelings about the Clean Water Act’s two permit programs is that they have the same statutory trigger, particularly when it comes to “waters of the United States.” If the Court constricts the definition of “waters of the United States” for Section 404, it simultaneously constricts the scope of the NPDES program.

So, here’s my bet: In Sackett, probably 6-3, the Supreme Court is going to adopt Justice Scalia’s test from Rapanos in a way that severely constricts the Section 404 program. However, because of County of Maui, the decision won’t matter all that much to the NPDES permit program.

To elaborate: Under Justice Kennedy’s significant nexus test from Rapanos—which all federal Courts of Appeals that have weighed in accept—Section 404 has become divorced from pollutants actually reaching a traditionally navigable waterway. Instead, as in Sackett itself, Clean Water Act jurisdiction under Section 404 often turns on whether destroying the wetland affects the chemical, physical, or biological integrity of the larger waterbody. Consider the Ninth Circuit’s reasoning regarding the Sacketts’ wetlands:

Water from these wetlands makes its way into Priest Lake via the unnamed tributary and Kalispell Creek. According to the July 2008 memo, these wetlands provide important ecological and water quality benefits; indeed, the memo identified this wetlands complex, which is one of the five largest along the 62-mile Priest Lake shoreline, as “especially important in maintaining the high quality of Priest Lake’s water, fish, and wildlife.” [Slip Op. at 32]

There is nothing in the opinion about the fill material actually reaching Priest Lake, which is a traditional navigable water, even though the Sacketts’ property isn’t that far from the lake.

In contrast, jurisdiction over smaller waterways for NPDES cases often turns on tracing the pollutants’ path to a larger waterbody. See, e.g., Cottonwood Environmental Law Center v Edwards, — F. Supp. 3d —, 2022 WL 952072, at *2 (D. Mont. Mar. 30, 2022) (noting that a dispute over whether the pollutants reached a larger waterbody was a material issue of fact precluding summary judgment). This standard of showing a “significant nexus” will also often support a County of Maui “functional equivalence” analysis, shifting the question for the smaller waterways (or groundwater) from whether they are “waters of the United States” to whether they are part of the point source conveyance to a larger waterbody.

In other words, the Supreme Court has found a path, if it chooses to finalize it, to separate the two permit programs. I’m betting that at least five Justices, and probably six, will so choose.