Samuel B. Boxerman is a Partner with Sidley Austin LLP in the firm’s Washington, DC office and is the WLF Legal Pulse’s Featured Expert Contributor on Environmental Law and Policy. Jim Wedeking is Counsel to Sidley Austin LLP. Jack Raffetto is an Associate with the firm.
Over the past week, the U.S. Supreme Court issued two important rulings interpreting federal environmental laws—the Clean Water Act and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
On April 23, the Court decided County of Maui v. Hawaii Wildlife Fund, finding the Clean Water Act requires a source to have a permit for a discharge to groundwater, if the discharge is “the functional equivalent” of a direct discharge to navigable waters. Whether a discharge is the “functional equivalent” will depend upon a multi-factored balancing test.
As discussed here previously, in Maui, the County operated a wastewater treatment plant, which injected partially treated sewage into underground wells. The wastes migrated from the wells to groundwater and subsequently seeped into the Pacific. At issue was whether by injecting the wastewater the County was discharging pollutants to a water of the United States without a permit under the Act. The lower courts said yes. The Ninth Circuit found the discharge required a permit because the sewage was “fairly traceable” back to the treatment plant (a point source under the Act).
In a 6-3 opinion by Justice Breyer, the Court reversed and remanded. The Court rejected both the “fairly traceable” test and the respondent’s suggestion to use a “proximate cause” standard, finding neither well-founded under the Act. The Court also rejected the bright-line test urged by the County and the Solicitor General of the United States that the Act applies only where a point source delivers pollutants directly to a navigable water, a position advanced by the United States Environmental Protection Agency (EPA) in an interpretive rule. That approach, the Court feared, would allow a source to evade permit requirements.
Instead, the Court established its own test, finding a permit for discharges to groundwater where those discharges are “the functional equivalent of a direct discharge from the point source into navigable waters,” meaning that “the discharge reaches the same result through roughly similar means.” This would be determined on a case-by-case basis, considering such factors as the purpose of the Act, whether a decision would interfere with state regulation of groundwater, the length of the discharge, the time taken to migrate from the point source to a jurisdictional water, the nature of the material through which the pollutant travels, and others.
The Court thus left it to permit writers, regulatory guidance drafters, and the lower federal courts to interpret and apply these factors over time—which may bring the issue back to the Supreme Court.
On April 20, the Court decided Atlantic Richfield Co. v. Christian, et al. The Court found state courts have jurisdiction over state-law claims related to CERCLA sites, but that EPA must grant property owners who are CERCLA potentially responsible parties (PRPs) permission before the owner can take action that differs from the EPA site remedy.
At issue was the Anaconda Smelter Superfund Site, a 300-square-mile area on EPA’s National Priorities List that had begun operation in the 1880’s. EPA has overseen work at the site for over three decades. In 2008, owners of private property within the Site filed suit in state court, asserting various tort claims arising out of historic contamination. The plaintiffs sought damages to fund restoration activities at their properties beyond the measures EPA had required. The state court rejected defendant’s claim that CERCLA foreclosed the plaintiffs’ suit, and the Supreme Court granted cert.
The Court first held that state courts could hear some state-law claims related to a CERCLA site. Atlantic Richfield had argued that because CERCLA barred a federal court from hearing challenges to an EPA remedy, it likewise barred the plaintiffs’ state-court actions. The Court disagreed, finding that CERCLA did not divest a state court of jurisdiction over non-CERCLA claims—and that plaintiffs’ damages claims were distinct from the EPA-ordered remedy.
The Court then held, however, that CERCLA prevents PRPs from using state law to require cleanup beyond the remedy EPA had ordered, unless they first obtained EPA’s agreement. As current owners of property within the site, the plaintiffs were PRPs under CERCLA § 107(a)—a status that did not allow them to interfere with EPA’s remedy, even if at the end of the day EPA would not have required these owners to fund it. Otherwise, the Court explained, “property owners would be free to dig up arsenic-infected soil and build trenches to redirect lead-contaminated groundwater without even notifying EPA. . . . We doubt Congress provided such a fragile remedy for such a serious problem.”
As such, the ruling does put to rest the question whether all state-law claims are foreclosed—while providing PRPs that implement an EPA remedy at CERCLA sites some certainty that a state court may not order work beyond the remedy EPA selected. The Court has left other questions open, however, such as what broader rights a plaintiff may have who is not a PRP or whether PRP claims that are not remedial would be allowed. Those questions, as in Maui, will be left to future litigation to resolve.