USEPA Provides Draft Guidance on Application of “Functional Equivalent” Analysis for Clean Water Act Permitting Program

The United States Environmental Protection Agency (USEPA) issued a Draft Guidance Memorandum regarding how to apply the Supreme Court’s most recent Clean Water Act decision in County of Maui v. Hawaii Wildlife Fund from earlier this year. In that case (which we previously wrote about here and here), the Court held that the Clean Water Act Section 402 National Pollutant Discharge Elimination System (NPDES) program requires a permit where there is a “functional equivalent of a direct discharge” from a “point source” into “navigable waters.” As the USEPA draft guidance notes, the Court’s decision outlines “seven non-exclusive factors that regulators and the regulated community may consider in determining whether a “functional equivalent of a direct discharge” exists in a particular circumstance. The draft guidance aims to place the functional equivalent standard “into context within existing NPDES permitting framework.” Additionally, the draft guidance “identifies an additional factor” relevant to the analysis.

The draft guidance emphasizes that the County of Maui decision did not modify the two threshold conditions that trigger the requirements for a permit. These conditions are that there must be an actual discharge of a pollutant to a water of the United States, and that that discharge must be from a point source. “Instead, Maui clarified that an NPDES permit is required for only a subset of discharges of pollutants that reach a water of the United States through groundwater—those that are the ‘functional equivalent’ of direct discharges to jurisdictional waters.” The requirement of an actual discharge of a pollutant or pollutants to a water of the United States is a “cornerstone” of the NPDES program, and if this threshold condition is not met, there is no need for a permit. Similarly, that the release of pollutants occurs from a point source is a necessary condition that must be met to trigger the need for a permit. “In other words, a release of pollutants from a point source that occurs near a water of the United States does not by itself trigger the NPDES permit requirements.” And, the “Supreme Court’s decision in Maui did not instruct NPDES permitting authorities to assume that discharges to groundwater that occur in the vicinity of a jurisdictional water are the ‘functional equivalent’ of direct discharges to that water.” (Emphasis in original.)

Instead, the USEPA recommends “considering whether a technical analysis would be prudent” where there are “indications” of a discharge through groundwater to waters of the United States. Such indications may include, “for example, a discharge of highly mobile pollutants from a point source directly to sandy soils, or in an area with shallow groundwater in close proximity to a” jurisdictional water. The type of technical analysis that the draft guidance identifies as being informative includes the evaluation of hydraulic conductivity based on variables such as soil type or porosity, depth to groundwater, and groundwater flow.

The draft guidance also clarifies that the “functional equivalent” standard will affect only a subset of discharges of pollutants to groundwater that ultimately reach a water of the United States. “A demonstration that pollutants from a point source have reached or will reach a water of the United States via groundwater does not by itself trigger the requirement for a NPDES permit.” USEPA will rely on “science,” which the Agency defines for its purposes here as “the characteristics of the pollutant itself and the nature of the subsurface aquifer and hydrogeology,” to determine “the effect of time and distance traveled on a discharge, and thus whether that discharge is ultimately the functional equivalent of a direct discharge.” In the guidance, USEPA suggests that whether or not that pollution composition remains the same from discharge at the point source to when it reaches a water of the United States may be central to the “functional equivalent” analysis.

As an additional factor not included in the non-exhaustive list provided by the Court in the Maui decision, USEPA identifies as a factor that “may prove relevant and thus should be considered when performing a ‘functional equivalent’ analysis: the design and performance of the system or facility from which the pollutant is released.” In fact, USEPA provides in the draft guidance that the design and performance of a system or facility might “affect or inform all seven factors identified in Maui.” The examples provided here include that a “point of discharge may be engineered to direct the pollutant into a subsurface aquitard or to a surface area designed to slow the transit time of a pollutant,” or that “the point of discharge may be located to intentionally increase the distance the pollutant would travel before reaching a water of the United States.”

The USEPA Draft Guidance Memorandum will be informative for the regulated community, as it provides some insight into how regulators will apply the Court’s pivotal decision in County of Maui.