Published by the ABA Environment & Energy Section by Sarah Peterman Bell, David Lazerwitz and Brian Wantz

A recent ruling by the Fourth Circuit Court of Appeals signals a marked expansion of jurisdiction and potential liability under the Clean Water Act (CWA). Reversing the trial court’s dismissal for failure to state a claim, the panel determined that unpermitted point source discharges that reach navigable waters indirectly, via groundwater, may lead to CWA liability. The court also rejected defendants’ alternative argument that the CWA does not authorize citizen suits where a former point source has been repaired and is no longer actively releasing contaminants.

The decision in Upstate Forever v. Kinder Morgan, Case No. 17-1640 (4th Cir. Apr. 12, 2018), analyzed two issues: (1) whether a discharge of pollutants that reaches navigable waters via groundwater can support liability under the CWA; and (2) whether a pipeline spill constitutes an “ongoing violation” where the pipeline has been repaired but the released pollutants continue to migrate to navigable waters. On both issues, the court answered “yes”.

The decision in Upstate Forever largely follows February’s Ninth Circuit decision in Hawai’i Wildlife Fund v. County of Maui, 886 F.3d 737 (9th Cir. 2018). Together, these cases signal a significant expansion of CWA jurisdiction and liability. Now, companies face potential CWA liability—or the specter of procuring a CWA permit under the National Pollutant Discharge Elimination System (NPDES)—for direct and indirect discharges to groundwater, including those from spills, leaks, surface impoundments, and leaking USTs.

CWA Liability for Indirect Discharges: Upstate Forever and Hawai’i Wildlife Fund

Upstate Forever arose following a 2014 underground pipeline spill in Anderson County, South Carolina that allegedly resulted in the release of over 369,000 gallons of gasoline. Although the pipeline was repaired, two environmental interest groups filed a CWA citizen suit over perceived delays in the recovery and remediation process, alleging that the unrecovered petroleum products continued to seep into nearby navigable and, hence, jurisdictional waters.

Defendants moved for dismissal of the action on two alternative grounds: (1) that plaintiffs had not stated a cognizable claim because the pipeline leak had not directly discharged to navigable waters subject to CWA jurisdiction; and (2) that the lack of ongoing releases from the pipeline precluded plaintiffs from alleging an ongoing violation of the CWA necessary to sustain a citizen suit under Gwaltney v. Chesapeake Bay Foundation, 484 U.S. 48 (1987). The trial court held that either defense was independently sufficient to support dismissal.

The Fourth Circuit reversed the trial court rulings on both issues and remanded for further proceedings in a 2-1 panel decision. Judge Barbara Milano Keenan, writing for the majority, described the indirect discharge liability issue as a “question of first impression” for the Fourth Circuit.

Clean Water Act Liability for Indirect Releases to Navigable Waters

The court first considered whether the CWA requires that pollutants discharge “directly” from a point source to protected waters. The court determined it does not, relying in part on language from Justice Scalia’s plurality opinion in Rapanos v. United States: “[t]he [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.’” 547 U.S. 715, 743 (1987) (emphasis in original). 

Applying a plain-language analysis to the CWA, the Fourth Circuit held that a directness requirement was not implied by the phrase “from . . . a point source,” noting that dictionary definitions of the word “from” include concepts like “starting point” or “cause” but do not require directness. Upstate Forever, Slip Op. at *21. The court rejected an interpretation of the CWA that would require discharges be “seamlessly channeled by point sources until the moment the pollutant enters navigable waters.” Id.

In doing so, the court followed and relied on a Ninth Circuit case from just months earlier that considered a similar issue: Hawai’i Wildlife Fund v. County of Maui, 886 F.3d 737 (9th Cir. 2018). Hawai’i Wildlife Fund involved a challenge by environmental groups to the County of Maui’s wastewater disposal practices. The County disposed 3 to 5 million gallons of treated sewage every day by injecting it into one of four wells at their wastewater reclamation facility. The parties did not dispute that some of the wastewater travelled through groundwater and reached the Pacific Ocean via submarine springs; the issue was whether such activities required an NPDES permit under the CWA. 

The Ninth Circuit, foreshadowing Upstate Forever, balked at an interpretation of the CWA that would limit liability to cases “where the point source itself directly feeds into the navigable water—e.g., via a pipe or a ditch.” Hawai’i Wildlife Fund, 881 F.3d at 748. The Fourth Circuit cited this language favorably.

What Standard to Apply?

Having determined that no direct connection between a point source and navigable waters was required for liability to attach under the CWA, the court turned to the question of causation: What standard should courts apply to determine whether groundwater has provided a sufficient connection between a point source and navigable waters?

Here, the Fourth Circuit again considered the result in Hawai’i Wildlife Fund, but this time reached a slightly different conclusion. In Hawai’i Wildlife Fund, the Ninth Circuit determined that an indirect discharge must be “fairly traceable” from a point source to protected waters. There, the court considered that standard satisfied where a tracer dye study confirmed that wastewater effluence from disposal wells reached the Pacific Ocean. 

The Fourth Circuit instead turned to a term of art favored by the Environmental Protection Agency (EPA): “direct hydrological connection.” The court held that the “complex and highly technical nature” of CWA enforcement means that the EPA’s interpretation of its statutory authority “warrants respectful consideration” under Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994). Citing federal guidelines and standards in which the EPA has asserted that CWA liability exists where a party discharges “from a point source via ground water that has a direct hydrologic connection to surface water,” the court determined “direct hydrological connection” to be the appropriate standard. Upstate Forever, Slip Op. at *22–23.

The court further explained that assessing whether such a connection exists is a factual inquiry, where “time and distance,” and “geology, flow, and slope” are all relevant. Id. Turning to whether plaintiffs had sufficiently alleged such a connection, the court held that they did: “plaintiffs have alleged that pollutants are seeping into navigable waters . . . about 1000 feet or less from the pipeline.” Id. at *24. Describing 1000 feet as an “extremely short distance,” the court held the pleadings sufficient under the newly adopted standard.

Whether “direct hydrological connection” is meaningfully different from “fairly traceable” is dubious. In fact, the Fourth Circuit itself noted that they saw “no functional difference” between the concepts, though they also suggested that “the direct hydrological connection concept may be viewed as a narrower application of the same principle, addressing point source discharges through ground water.” Id. at *24, n. 12 (emphasis in original).

Upstate Forever and the Gwaltney Standard

Defendants had also moved to dismiss for lack of jurisdiction, arguing under Gwaltney that the CWA authorizes citizen suits only for continuous or ongoing intermittent violations, whereas their pipeline had long since been repaired. The Fourth Circuit disagreed, holding that the CWA does not require that the point source continue to release a pollutant—only that the discharge from the point source continue to release a pollutant. Upstate Forever, Slip Op. at *14–16. 

The court reiterated a distinction it had made three years prior in Goldfarb v. Mayor of Baltimore, between “a defendant’s conduct that is causing a violation [that] may have ceased in the past” and a “violation [that] is continuous or ongoing.” 791 F.3d 500, 511–13 (4th Cir. 2015) (emphasis in original).

Turning to the “plain language” of the CWA, the court considered the CWA’s requirement that in order to support a citizen suit, the citizen must allege “that the polluter ‘be in violation of’ an ‘effluent standard or limitation’ under the [CWA].” Upstate Forever, Slip Op. at *15. The court noted that by statute, an “effluent limitation” includes an unpermitted “discharge of a pollutant,” and that the CWA defines “discharge” as “any addition of any pollutant to navigable waters from any point source.” Id. at *16.

Plaintiffs did not contest that the pipeline had been repaired; instead they asserted that unrecovered petroleum products had formed a plume that was continuously seeping into groundwater and from there to navigable waters. In the court’s view, this was an allegation of and “ongoing ‘addition . . . to navigable waters,’” and thus satisfied the pleading requirements of the citizen suit provision, “regardless whether a defendant’s conduct causing the violation is ongoing.” Id.

(This “continuous discharge” issue was not addressed in Hawai’i Wildlife Fund, as the parties agreed that the County of Maui’s discharge activities were ongoing.)

What the Rulings Mean

Together, Hawai’i Wildlife Fund and Upstate Forever suggest a significant expansion of CWA liability and potential permitting requirements for the regulated community. These authorities mean that industry and individuals need to carefully consider discharges to land or groundwater that could potentially reach navigable waters and evaluate whether CWA permitting is required, in addition to other potentially applicable federal and state permits. Moreover, as cautioned by Upstate Forever, where accidental spills and leaks are concerned, companies and environmental managers will need to consider ongoing migration of contaminants through groundwater well after the cause of discharges may have been resolved.