EPA Drafts New Guidance on County of Maui’s “Functional Equivalent” Test

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On November 20, 2023, the U.S. Environmental Protection Agency (EPA) issued Draft Guidance, again attempting to interpret the Supreme Court decision in County of Maui v. Hawaii Wildlife Fund and describe in practical terms how the newly articulated “functional equivalent analysis” can be applied to the existing National Pollutant Discharge Elimination System (NPDES) Permitting framework. This draft follows a previous attempt by EPA to provide such guidance (draft issued in December 2020, final guidance in January 2021, guidance rescinded in September 2021). Comments on the Draft Guidance are being solicited, and must be received by December 27, 2023.

County of Maui was decided on April 23, 2020, and determined that a discharge to groundwater from a wastewater treatment facility’s injection well could be the “functional equivalent” of a discharge to navigable waters where the wastewater’s migration from the injection well to the ocean was clearly ascertainable. The decision opened up the possibility that myriad discharges of pollutants that make their way through groundwater to navigable waters may now require a Clean Water Act permit, regardless of the nature of the source of the pollution or the intentions of the source’s owner. In creating the new “functional equivalent” standard, the Supreme Court outlined seven factors that may be relevant in determining whether a given discharge does or does not require a permit under the Clean Water Act:

(1) [T]ransit time, (2) distance traveled, (3) the nature of the material through which the pollutant travels, (4) the extent to which the pollutant is diluted or chemically changed as it travels, (5) the amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source, (6) the manner by or area in which the pollutant enters the navigable waters, (7) the degree to which the pollution (at that point) has maintained its specific identity. 140 S.Ct. 1462. 1476-77 (2020).

The Supreme Court made clear this list of factors is not intended to be exclusive, and not every factor is likely to be relevant in every case. The court noted that “time and distance will be the most important factors in most cases, but not necessarily in every case.” The decision acknowledged that determinations of “functional equivalence” would be necessarily made on a case-by-case basis, and that guidance from regulators would be required to administer this new test.

Bluntly, the new EPA Draft Guidance does very little to clarify the relatively grey areas outlined by the Supreme Court Opinion. In the draft, EPA acknowledges the Supreme Court’s view that time and distance from discharge to a navigable water are likely to be the most important factors in most cases, but goes little further than the Court did in discussing how much time or distance is enough to defeat “functional equivalence.” EPA’s latest draft cites the Court’s expression of doubt that “a discharge ending 50 miles from a navigable water with a groundwater transit time of ‘many’ years” would qualify as a functional equivalent of a direct discharge, and that discharges that travel only a few feet or yards likely would require an NPDES permit. Between these far-flung extremes, however, dischargers are left to guess.

EPA’s Draft Guidance does attempt to highlight the importance of factors other than time and distance in many circumstances, and provides some guidance for how a discharger should apply for an NPDES Permit if it has a functional equivalent of a direct discharge. It also reiterates other conclusions of the Court in Maui: that both the intent of the discharger and the existence of a state groundwater protection program in the state of the discharge are irrelevant to the application of Maui principles and the potential need for an NPDES permit. But one could reasonably conclude that the Draft Guidance does little more than restate the most concrete elements of the Supreme Court’s opinion without providing any additional clarity to the regulated community.

The overall thrust of the Draft Guidance appears to be that EPA is placing the onus on dischargers to determine their own need for an NPDES Permit if they have a discharge to groundwater. This is a not-insignificant responsibility, since failure to obtain an NPDES permit if one is required, even under the nebulous and evolving standards established by Maui, can result in substantial liability for civil, and even criminal, penalties. Conversely, the compliance and other burdens associated with an NPDES permit is more than most operators would care to assume where the permit is not actually necessary to protect navigable waters.

For industries with discharges to groundwater, EPA’s Draft Guidance acknowledges that the first step in this determination is establishing whether those discharges to groundwater actually reach a water of the United States. This can be a less than straightforward conclusion to reach, depending on time, distance, the influence of other contributors to pollutants in groundwater, and myriad other factors. Even once such a groundwater connection is established, the factors enumerated by Maui must be weighed appropriately, and direct coordination with the regulatory authority may be required, to determine whether an NPDES permit is actually required. The advice of qualified technical consultants and environmental legal counsel will be invaluable in proactively addressing potential NPDES requirements under the “functional equivalence” standard.   

Comments on the Draft Guidance may be submitted to Docket # EPA-HQ-OW-2023-0551 by December 27, 2023.