U.S. Supreme Court Limits EPA Clean Water Act Permitting Authority

Case Background

The Clean Water Act created the National Pollutant Discharge Elimination System ("NPDES") and made it unlawful to discharge "pollutants" (a broadly defined term) into covered bodies of water unless authorized by permit. The Act authorizes the EPA and state agencies to include various "limitations" in NPDES permits: "effluent limitations" (which specify the quantities of enumerated pollutants that may be discharged) and "any more stringent limitation, including those necessary to meet" or "implement" water-quality standards. The EPA often uses this "any more stringent limitation" language to issue nonquantitative "narrative limitations" (such as a provision requiring permittees to follow certain "best practices").

San Francisco owns a wastewater treatment facility, the Oceanside facility, that has an NPDES permit. In 2019, EPA added two "end-result" limitations to the Oceanside facility's permit during a renewal action. These end-result limitations do not spell out what a permittee must do or refrain from doing; rather, they make the permittee responsible for the quality of the water into which the permittee discharges pollutants. One of these limitations prohibited the Oceanside facility from "contribut[ing] to a violation of any applicable water standard" for receiving waters. The other prohibited the city from making any discharge that "create[s] pollution, contamination, or nuisance as defined by" California law.

San Francisco challenged these end-result limitations as violating the Clean Water Act. The EPA's internal review board rejected that challenge. San Francisco then filed a petition for review in the U.S. Court of Appeals for the Ninth Circuit. A divided panel affirmed. The Supreme Court then granted review.

The Decision

The Supreme Court ultimately reversed the Ninth Circuit by a 5-4 vote and held that the Clean Water Act did not authorize end-result limitations in NPDES permits.

1. Justice Alito, writing for eight Justices on this point, first rejected San Francisco's lead argument. The city argued that the EPA could only issue "effluent limitations" (i.e., quantitative limitations on substances that may be discharged) in pollutant-discharge permits. The Court explained that Congress used different language in neighboring sections of the Clean Water Act, authorizing the EPA to issue "effluent limitations" and "any more stringent limitation" needed to protect water quality. That textual difference showed that Congress authorized the EPA to issue more than just effluent limitations.

2. Justice Alito, writing for five Justices, then agreed with the city that the Clean Water Act did not authorize the EPA's end-result limitations—i.e., the permit provisions mandating that "receiving waters meet applicable water quality standards." The Court relied on the text, structure, and statutory history of the Clean Water Act to reach this conclusion.

Text. Justice Alito noted that the Clean Water Act authorizes the EPA to issue "any more stringent limitation" that is "necessary to meet" certain "water quality standards" or "required to implement any applicable water quality standard." Those italicized terms suggest that the EPA can only set rules that a permittee must follow to achieve a desired result. For example, the phrase "to implement" suggests that the EPA will provide a concrete plan for a permittee to follow and not a vague standard to satisfy.

Structure. Justice Alito emphasized two structural features of the Clean Water Act. The Act contains a "permit shield" provision under which a permittee is deemed to be in compliance with the statute if it follows all of the terms in its permit. But this provision would be eviscerated if the permittee were subject to a vague standard about receiving-water quality that could take months to assess, with the permittee accruing penalties all the while. Moreover, the Act lacks any provision dealing with the problem that arises when multiple permittees discharge pollutants into the same body of water. Congress would not have authorized end-result limitations without setting out a method for resolving the vexing multidischarger problem.

History. Finally, Justice Alito relied on the statutory history of the Clean Water Act. A prior version of the statute would have held a permittee liable if the quality of the water into which it discharged pollutants failed to meet water quality standards. But Congress scrapped that provision when it overhauled federal law by passing the Clean Water Act in 1972.

Along the way, Justice Alito also quickly rejected the EPA's reliance on historical guidance that it issued in 1995. "Congress did not codify that guidance," he explained, and the Court is "not obligated to accept administrative guidance that conflicts with the statutory language it purports to implement."

3. Justice Barrett, writing for four Justices, dissented from the Court's holding on end-result limitations. In her view, an end-result limitation is plainly a "limitation" as that word is ordinarily used. Justice Barrett also noted that eliminating end-result limitations will make it more burdensome to issue pollutant-discharge permits, which may lead the EPA to delay or deny such permits.

Immediate Impact

The two challenged end-result limitations in San Francisco's NPDES permit for the Oceanside facility are unenforceable under the Clean Water Act. More generally, the regulated community will now enjoy greater clarity on pollutant-discharge permit limitations, as EPA can no longer penalize permit holders merely for the poor quality of receiving waters. This will help ensure fair notice for regulated parties before they are subject to the Clean Water Act's draconian penalty scheme, but may come at the cost of delaying or denying pollutant-discharge permits. Indeed, approximately one-third of NPDES-permit renewals are backlogged already and EPA, like other federal agencies, may reduce staff in the coming months.