Clean Water Act Groundwater Pollution Liability in Limbo

The Clean Water Act (CWA) is facing an identity crisis. In the past year, conflicting federal court decisions have created a circuit split as to whether the CWA regulates pollutant releases into groundwater that is hydrologically connected to navigable waters.¹ The Ninth and Fourth Circuits interpreted CWA liability broadly, applying to indirect releases of pollutants into federally protected surface waters via groundwater. The Sixth Circuit interpreted CWA liability narrowly, applying to only direct releases of pollutants into federally protected surface waters.

The uncertainty leaves regulators and the regulated community in limbo and awaiting a possible U.S. Supreme Court decision and clarifying action by the U.S. Environmental Protection Agency (EPA). While in limbo, operators in various industries – e.g., oil and gas, wastewater utilities, electric utilities, water providers, mining – are at risk of possible agency requests for groundwater quality data, enforcement action or possible citizen suits for illegal discharges based on pollution releases into groundwater that is hydrologically connected to a navigable water covered by the CWA.

“Discharge of a Pollutant”: Few Words, Many Interpretations

The CWA prohibits the “discharge of any pollutant by any person,” and defines “discharge of a pollutant” as “any addition of any pollutant to navigable waters from any point source.”² The words “to” and “from” emphasized here are at the heart of the debate – how much time and distance can pass in between those words? Obviously, a pipeline that releases pollutants directly and instantaneously into navigable waters satisfies this definition. But what about a pipeline that releases pollutants deep underground that percolate through the groundwater over several months, and eventually release into navigable waters? Complicating the analysis is the debate over what constitutes a “point source,” which the CWA defines as “any discernible, confined and discrete conveyance” such as a pipe or a well.³

Courts have wrestled with the meaning of this text for decades. The most famous case was Rapanos v. United States, a 2006 splintered, one-hundred-plus page U.S. Supreme Court decision that spanned many issues and is most known for its ruling on the CWA navigable waters (i.e., “waters of the United States”) interpretation issue.⁴ As relevant to our issue here, in Rapanos, Justice Antonin Scalia observed that the CWA “does not forbid the ‘addition of any pollutant directly to navigable waters from any point source,’ but rather the ‘addition of any pollutant to navigable waters.’”⁵

Circuit Split: Groundwater Makes Things Tricky

Fast-forward to earlier this year, when the first of several federal circuit court decisions was issued, addressing the question of whether there is CWA liability, as an illegal discharge, for pollution that finds its way to a navigable water via groundwater. In March 2018, the Ninth Circuit in Hawai’i Wildlife Fund held that Maui County was liable under the CWA when, without a permit, it released treated wastewater into injection wells that was traced to the Pacific Ocean three months later.⁶ The Court found there was a “fairly traceable” connection from a point source to a navigable waterway, despite the delayed migration through a groundwater intermediary.⁷ Similarly, a month later, the Fourth Circuit in Upstate Forever held that Kinder Morgan Energy Partners was liable under the CWA when one of its gasoline pipelines ruptured six to eight feet underground and seeped over years into nearby rivers and wetlands.⁸ The Court found there was a “direct hydrological connection.”⁹

Then, in mid-September 2018, in Virginia Electric & Power Company, also in the Fourth Circuit, the Court concluded that while there was a direct hydrological connection between a coal-fired power plant’s coal ash landfill and settling ponds and arsenic in nearby rivers, the landfill and settling ponds did not constitute “point sources” under the CWA and therefore they were not subject to CWA liability.¹⁰ The Fourth Circuit reasoned that “point sources,” are defined as “any discernible, confined and discrete conveyance,” whereas the coal ash landfill and ponds were “static recipients” of rainwater and groundwater that flowed diffusely through them.¹¹ Additionally, the Court noted that the arsenic contamination would still be regulated under the Resource Conservation and Recovery Act (RCRA) and specific regulations pertaining to coal combustion residuals (the CCR Rule).¹² Thus, while the Fourth Circuit has acknowledged the “direct hydrological connection” test for groundwater pollution, it reined in the meaning of “point sources” and acknowledged the role of other legal authorities in place to protect water resources.

Even more recently – in late September 2018, the Sixth Circuit in Tennessee Valley Authority and Kentucky Waterways Alliance rejected the hydrological connection theory applied by the Ninth and Fourth Circuits.¹³ The Sixth Circuit held that two coal-fired power plants were not liable under the CWA when their coal ash settling ponds leaked selenium and other chemicals into nearby waterbodies.¹⁴ The Court relied on the CWA term “effluent limitation,” which is related to the “discharge of a pollutant” term discussed above and defined as restrictions on pollutants “which are discharged from point sources into navigable waters.”¹⁵ The Sixth Circuit held that the word “into” indicated directness and “leaves no room for intermediary mediums to carry the pollutants.”¹⁶ Like the Fourth Circuit in Virginia Electric & Power Company, the Sixth Circuit held that coal ash pollution was better regulated under RCRA and the CCR Rule.¹⁷ Also like the Fourth Circuit in Virginia Electric & Power Company, the Sixth Circuit seemed to reject that coal ash ponds could constitute...