San Francisco v. EPA brings the end of “End Result” NPDES permit requirements

In its recent decision in San Francisco v. EPA, the U.S. Supreme Court overturned a Ninth Circuit interpretation of the Clean Water Act (“CWA”), the second case in just two years where the Court has disagreed with the EPA’s interpretation of certain provisions of the CWA. Under the CWA, any person or entity that “discharges” “pollutants” into the “waters of the United States” is required to hold NPDES permits which impose limits on the pollutants that can be discharged, and often prescribe steps the discharger must take in accordance with its permit.

In this case, San Francisco (or “the city”) operated a combined wastewater treatment facility (processing both wastewater and stormwater) under an NPDES permit for many years, regulating the discharge of pollutants into the “receiving waters” of the Pacific Ocean. In 2019, the city’s renewal permit included for the first time two “end-result requirements,” which prohibited the city from (1) making any discharge that “contribute[d] to a violation of any applicable standard” for the receiving waters; and (2) making any discharge that “create[d] pollution, contamination, or nuisance as defined by California Water Code section 13050.” San Francisco appealed its permit renewal to the EPA, challenging the two “end-result requirements,” among other issues. The EPA’s Environmental Appeals Board, and later the Ninth Circuit, both held that the EPA was within its rights to include such provisions in the permit.

The Court disagreed with the EPA and the Ninth Circuit that CWA Section 301(b)(1)(C) (33 U.S.C. §  1311(b)(1)(C)) authorizes “end-result requirements,” holding that in the Court’s interpretation, Congress did not intend or authorize EPA to impose NPDES permit requirements that condition permitholders’ compliance on whether receiving waters meet applicable water quality standards. Instead, it is the EPA’s responsibility to determine what steps a permittee must take to ensure that water quality standards are met (not permittees).

However, the Court did not agree with San Francisco that narrative limits were not authorized at all under the CWA. San Francisco argued that the language of Section 1311(b)(1)(C) authorized only numerical effluent limitations and not narrative standards, but the Court did not go that far, holding that it is common for permits to contain legitimate narrative provisions, which require permittees to follow best practices. Further, the Court held that end-result requirements would negate the CWA’s “permit shield,” whereby permittees in compliance with active permits are protected from liability.

The Good

At first blush, this decision seems spectacular for NPDES permittees, but enthusiasm should be restrained.

At the federal level, this decision means “end-result requirements,” which hold permittees responsible for receiving waters’ water quality, are no longer allowed. This would apply to NPDES permits issued by EPA, including in states that are not delegated NPDES permitting authority.

At the state level, many states’ NPDES permitting program regulations closely follow the provisions of the CWA, if not verbatim. The Court’s decision was based on an interpretation of the CWA definition of “effluent limitation,” which many states also use in their own authorizing acts. This means that if state NPDES permitting authorities attempt to include “end-result requirements” or other overly broad limitations in a discharge permit, as the EPA did here, the court could interpret the text of those provisions as the U.S. Supreme Court did, and find that such provisions were not authorized by statute.

Additionally, because the Court did not agree that the CWA authorizes only numerical effluent limitations, this means that the opinion should not disturb the application of the “permit shield” for permittees following narrative limits in their permits.

Finally, it remains to be seen how permitting authorities will respond to the holding as they gather data and information to craft effluent limitations in permits that are consistent with the Court’s holding.

What industry stakeholders should know going forward  

Most states are delegated permitting authority in authorizing statutes similar to the CWA. However, not all state laws mirror the language of the CWA as closely as others, so permittees need to analyze the state laws they operate under. Some states default to mirroring federal laws, while others seem to take pride in doing the opposite.

For permittees who believe their permits may include overly broad limitations, it is important to understand your state’s authorizing statutes, corresponding regulations, and your state-issued discharge permit. However, depending on which way your state’s authorizing statute is drafted, and how closely it mirrors the CWA and EPA guidelines, the decision in San Francisco v. EPA, could have a stronger or weaker effect.

Clark Hill’s Environmental, Energy, and Natural Resources practice is here to help you with this task, and any other help you may need regarding permitting requirements under the CWA and state law.

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