On Sept. 12, 2018, the Fourth Circuit released a decision in Sierra Club v. Virginia Electric & Power Co. (Dominion Energy Inc.).[1] This important decision resulted in a split in the Fourth Circuit, as well as further exacerbating a split in the circuits regarding the interpretation of the term “point-source” and the way in which groundwater is regulated by the Clean Water Act as a conduit for pollutants to enter navigable waters.
After this decision, which contradicts Upstate Forever et al. v. Kinder Morgan Energy Partners LP,[2] industries, municipalities and property owners located in the jurisdiction of the Fourth Circuit are uncertain whether pollutants conveyed through groundwater to navigable waters is not governed by the Clean Water Act. Further, industries, municipalities and property owners are also uncertain in the Ninth Circuit and the Sixth Circuit due to differing interpretations of the applicable provisions in the Clean Water Act pertaining to groundwater conveying pollutants to navigable waters. The CWA’s jurisdiction over “water to water” pollutant conveyance is ripe for review by the U.S. Supreme Court, which is considering whether to grant certiorari in several of the disparate cases.
The Clean Water Act requires a National Pollutant Discharge Elimination System, or NPDES, permit for the “discharge of pollutants” into navigable waters. Under the Clean Water Act, a “discharge” is defined as “any addition of any pollutant to navigable waters from any point source.”[3] Although the U.S. Environmental Protection Agency has jurisdiction to permit and regulate such discharges, the states regulate all other forms of pollution, including the discharge of pollutants into soil and groundwater.
Dominion operated a coal-fired power plant in Chesapeake, Virginia, that produced coal ash as a by-product. Dominion obtained permits from the Virginia Department of Environmental Quality, or VQED, under the CWA and the Resource Conservation and Recovery Act, or RCRA, to store the coal ash on site in a landfill and in settling ponds. When water passes through coal ash it can leach arsenic. In 2002, Dominion began testing the groundwater around the site as a requirement of its VQED permits and found levels of arsenic that exceeded Virginia’s groundwater quality standards.
The Dominion case arose in March 2015, when Sierra Club brought the action against Dominion under the citizen-suit provision of the CWA, alleging that Dominion was in violation of 33 U.S.C. § 1311(a), which prohibits the unauthorized discharge of any pollutant into navigable waters. The CWA explicitly defines the discharge of any pollutant as the “addition of any pollutant to navigable waters from any point source.”[4] Sierra Club alleged that the settling ponds and landfill used by Dominion to store coal ash qualify as discrete point sources which conveyed arsenic to nearby navigable waters including the Elizabeth River and Deep Creek, by way of the groundwater. According to the allegations, arsenic leached from the coal ash in the settling ponds and landfill resulting in an indirect discharge to navigable waters, conveyed through the groundwater.
Central to the split in the circuits is the interpretation of the term “point source.” According to the CWA, “the term ‘point source’ means any discernible, confined and discrete conveyance […] from which pollutants are or may be discharged.”[5] Dominion argued that the landfill and settling ponds do not constitute point sources because they are “stationary feature[s] of the landscape through which rainwater or groundwater can move diffusely,” rather than “discernible, confined and discrete conveyance[s].”[6] In other words, Dominion argued that groundwater is not a direct conveyance under the CWA. Instead, Dominion contends that both of these features should be regulated under the RCRA, not the CWA, because the RCRA contains specific regulations governing the treatment and storage of coal ash, as well as its effects on both ground waters and surface waters. Acknowledging this, the court found that “while arsenic from the coal ash stored on Dominion’s site was found to have reached navigable waters […] that simple causal link does not fulfill the CWA’s requirement that the discharge be from a point source. […] At its core, the Act’s definition makes clear that some facility must be involved that functions as a discrete, not generalized, ‘conveyance.’”[7]
The Dominion court’s interpretation is inapposite to an earlier Fourth Circuit interpretation of the same issues in Upstate Forever et al. v. Kinder Morgan Energy Partners LP. The Kinder Morgan case involved a large gasoline spill from a ruptured pipeline owned by Kinder Morgan. The plaintiffs alleged that several hundred thousand gallons of gasoline spilled from the pipe, traveled through groundwater reserves, and entered into navigable waterways located around the site. In their complaint, plaintiffs alleged “two interrelated violations of the CWA: (1) that Kinder Morgan has caused discharges of pollutants from point sources to navigable waters without a permit; and (2) that Kinder Morgan […] caused discharges of pollutants that [passed] through ground water with a ‘direct hydrological connection’ to navigable waters.”[8] Kinder Morgan, on the other hand, argued that the CWA does not regulate discharges into navigable waters via hydrologically connected groundwater. A district court agreed and found that it lacked subject matter jurisdiction over the complaint. Following an appeal by the plaintiffs, the case was brought before the Fourth Circuit.
The primary issue before the Fourth Circuit in Kinder Morgan was the question of whether an indirect discharge of pollutants to navigable waters by way of hydrologically connected groundwater can support a theory of liability under the CWA. Initially, the court observed that a discharge violating the CWA is not automatically a discharge directly to a navigable water from a point source. Citing U.S. Supreme Court Justice Antonin Scalia’s plurality opinion in Rapanos v. United States, the court noted “federal courts consistently have held that a discharge of a pollutant ‘that naturally washes downstream likely violates §1311(a).’”[9] However, Justice Scalia also noted 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.’”[10] Justice Scalia’s emphasis on the term “directly” was latched onto by the Kinder Morgan court, which concluded “just as the CWA’s definition of a discharge of a pollutant does not require a discharge directly to navigable waters, neither does the Act require a discharge directly from a point source.”[11]
This conclusion was contradicted by the Dominion court, which held that the settling ponds and landfills used by Dominion did not function as discrete conveyances and were not point sources under the CWA. The Dominion court concluded that “the actual means of conveyance of the arsenic was the rainwater and groundwater flowing diffusely through the soil”[12] and, thus, not a violation. In contrast, the Kinder Morgan court found that the natural diffusion of pollutants into the groundwater did, in fact, constitute a violation under the CWA. Moreover, the Kinder Morgan court found that “a point source is the starting point or cause of a discharge under the CWA, but that starting point need not also convey the discharge directly to navigable waters” in order to be a violation.[13] While Dominion established the point of active conveyance is necessary for a point source, Kinder Morgan held that indirect and natural conveyance is sufficient to establish liability under the CWA.
This split in the Fourth Circuit over whether or not hydrologically connected groundwater is a point source under the CWA is echoed in a number of other cases around the United States, which has placed this issue in the cross hairs of the U.S. Supreme Court’s jurisdiction for review. While the fact patterns differ slightly in subsequent cases, the split in ideology is still clear. Where the courts in Dominion and Kinder Morgan differed in their view of the importance and definition of “point source,” two other cases in the Ninth Circuit and Sixth Circuit respectively, Hawaii Wildlife Fund v. County of Maui and Kentucky Waterways Alliance et al. v. Kentucky Utilities Co., further split the circuits over whether groundwater that is hydrologically connected to navigable waters is regulated under the CWA.
The first case in question, County of Maui, deals with a set of four injection wells used by the county of Maui at the Lahaina Wastewater Reclamation Facility. These wells are used to inject approximately 3 to 5 million gallons of treated wastewater per day into the groundwater. After it was found that the groundwater was hydrologically connected to the Pacific Ocean, the Hawaii Wildlife Fund, along with other environmental groups such as the Sierra Club and the Surfrider Foundation, filed suit against the County of Maui, alleging violations under the CWA.
In this case, neither party disputed the fact that the wells should be considered point sources. In fact, the CWA specifically designates wells as an example of points of discharge that are considered point sources. At issue in this case, however, was the fact that the point source in question was not polluting directly into navigable waters, but instead traveled through groundwater before entering the Pacific Ocean. Noting that neither party in this case denies the connection between the wells and the Pacific Ocean, the court found that the fact that “the groundwater plays a role in delivering the pollutants from the wells to the navigable water does not preclude liability under the statute.”[14] Furthermore, like the court in Dominion, the court in County of Maui went on to cite Justice Scalia’s opinion in Rapanos that a discharge can violate the CWA “even if the pollutants discharged from a point source do not emit ‘directly into’ covered waters, but pass ‘through conveyances’ in between.”[15] Accordingly, the court found the County of Maui liable under the CWA.
On the other hand, in Kentucky Utilities, the Eastern District of Kentucky in the Sixth Circuit held an inapposite interpretation of the scope of the CWA’s application to groundwater. The case was brought by the Kentucky Waterways Alliance after it was discovered that settling ponds containing coal combustion residuals were alleged to be leaking arsenic, boron, lead and other chemicals into a navigable waterway via the groundwater. Similar to County of Maui, the court was tasked with deciding whether or not groundwater that is hydrologically connected to navigable waters is covered under the CWA. Yet, contrary to the County of Maui case, the court in Kentucky Utilities found that it was not. Noting that “groundwater is, by its nature, “a diffuse medium” and not the kind of discernible, confined and discrete conveyance contemplated by the CWA’s definition of “point source,” the court held “the discharge of a pollutant from hydrologically connected groundwater to a navigable water does not constitute the discharge of a pollutant from a point source to a navigable water under the CWA.”[16] Furthermore, the court went on to frame this decision in the context of the structure and intent of the CWA itself. The court argued that if hydrologically connected groundwater was found to be covered under the CWA, it would result in a causal chain wherein any non-point source pollution could be traced back to its original introduction into the environment. As a result, this process would ‘lead to the extensive regulation of non-point source pollution and would ‘effectively read the ‘point source’ requirement out of the Clean Water Act.’”[17]
All of these cases point to the inherent ideological split between courts in multiple circuits over the extent that groundwater can be covered under the CWA. Parties in both County of Maui and Kinder Morgan have filed petitions for writs of certiorari, asking the Supreme Court to review their cases and resolve the circuit split. Kinder Morgan requested Supreme Court review of the following questions: (1) whether a National Pollutant Discharge Elimination System permit is limited to discharges from a point source, or whether it also applies to discharges into soil or groundwater whenever there is a “direct hydrological connection” between the groundwater and nearby navigable waters; and (2) whether an “ongoing violation” of the CWA exists for purposes of the act’s citizen-suit provision when a point source has permanently ceased discharging pollutants, but some of the pollutants are still reaching navigable water through groundwater.[18] Similarly, the County of Maui petitioned the Supreme Court for writ of certioriari to review the Ninth Circuit’s ruling that groundwater to navigable water is regulated by the CWA.
Many experts expect the Supreme Court to grant certiorari due to the courts’ differing interpretations of the CWA’s jurisdiction over hydrologically connected groundwater, versus the jurisdiction of the states. If granted, the result could have far-reaching implications and could greatly expand the scope of the CWA.
Under an interpretation of the CWA that regulates groundwater, businesses with landfills, settling ponds, injection wells and potentially irrigation of recycled water, which discharges into groundwater that is hydrologically connected to navigable water would be required to obtain a NPDES permit prior to such discharge. Likewise, the scope and reach of the RCRA, which currently covers discharge from waste related storage and disposal, including for example coal ash settling ponds, could overlap with an expanded CWA, increasing the agencies with jurisdiction and creating uncertainty and complexity in compliance with multiple overlapping regulations.
It also has been argued that expanding the CWA’s regulatory authority to include hydrologically connected groundwater could limit the power of the states to regulate non-point sources. This argument echoes concerns by states and industry groups who challenged the Obama administration’s 2015 Waters of the United States, or WOTUS, Clean Water Rule, contending that the rule’s expansion of the definition of WOTUS to include certain diffuse conduits to navigable waters to be a violation of states’ rights to regulate those conduits. Litigation concerning the validity of WOTUS is ongoing, resulting in different rules in different states, depending on the status of the litigation in each state. Specifically, the U.S. District Court for the District of South Carolina vacated and nationally enjoined the Trump administration’s efforts to delay the effective date of the 2015 Clean Water Rule.[19] Pursuant to the court’s order, the 2015 Clean Water Rule is now in effect in 26 states, Washington, D.C., and the U.S. territories. The Clean Water Rule remains enjoined, and the previous CWA regulations remain in effect, in the remaining 24 states due to two previous district court injunctions issued in North Dakota and Georgia. Parties to the case, including the EPA and the U.S. Army Corps of Engineers, have filed motions appealing the order and seeking a stay of the district court’s decision. The South Carolina decision has been appealed to the Fourth Circuit, the same circuit that is split in its interpretation of the CWA’s jurisdiction over groundwater that is hydrologically connected to navigable waters.
Until these issues are resolved by the Supreme Court, or by a new rule by the EPA and Army Corps of Engineers under the CWA (subject to public notice and comment), the CWA’s regulation of groundwater that his hydrologically connected to navigable waters will differ state to state. Locations of injection wells, reinjection wells, dust control, stormwater containment, settling ponds and other potential water infiltration that connects to groundwater at landfills, wastewater treatment, mining sites, agriculture, golf courses, energy processing and many other industries, should be assessed to determine if the facts and jurisdiction require permitting or could result in liability.
The article is also available on the Law 360 website, here.
[1] Sierra Club v. Virginia Electric & Power Company No. 17-1895, at 12 (Sept. 12, 2018), petition for writ of certiorari filed Aug. 28, 2018. Virginia Electric & Power Company is currently doing business as Dominion Energy Virginia (Dominion).
[2] Upstate Forever et al. v. Kinder Morgan Energy Partners LP , 887 F.3d 637 (4th Cir. 2018).
[3] 33 U.S.C. § 1362(12).
[4] Id.
[5] Id. at §1362(14).
[6] Dominion at 12.
[7] Id. at 13.
[8] Kinder Morgan, at 644-645.
[9] Id. at 650.
[10] 547 U.S. 715, 743 (2006) (plurality opinion) (emphasis in original) (quoting §§ 1311(a), 1362(12)(A)).
[11] Kinder Morgan at 650 (internal citation omitted).
[12] Virginia Electric & Power Company, at 15.
[13] Kinder Morgan at 650.
[14] Hawaii Wildlife Fund v. County of Maui , 881 F.3d 754, 763 (9th Cir. 2018).
[15] Id. at 764.
[16] Kentucky Waterways Alliance et al. v. Kentucky Utilities Co. , Civil Action No. 5: 17-292-DCR, at 21 (Dec. 28, 2017).
[17] Id. at 23.
[18] Kinder Morgan Energy Partners LP v. Upstate Forever, petition for writ of certiorari filed Aug. 28, 2018.
[19] South Carolina Coastal Conservation League v. Pruitt , No. 2-18-cv-330-DCN (Aug. 16, 2018).