…& Legal Impacts on Clean Water Act Enforcement

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A recent Clean Water Act (CWA) case, City and County of San Francisco v. EPA, has the potential to impact policy around CWA enforcement and could be significant for water quality regulation across the United States. To learn more about the case and its significance, we asked Melissa Reynolds, associate at Holland & Hart, for some perspective. Reynolds works with clients to provide counsel on water quality and environmental compliance issues that may arise during project development, operation and closure. Prior to joining Holland & Hart, Reynolds worked for the Utah Attorney General’s Office’s Natural Resources Division, where she acted as general counsel to the State Engineer, and developed a comprehensive understanding of water rights statutes in Utah.

Can you briefly summarize the recent City and County of San Francisco v. EPA case and the general arguments on both sides regarding Clean Water Act enforcement?

This case challenges the ability of EPA and states with delegated CWA programs to impose vague narrative standards in discharge permits issued for sewer overflows. EPA issued a combined sewer overflow permit to the City of San Francisco for its sewage system, and among other things, the permit prohibited discharges that “cause or contribute” to violations of water quality standards. For some time, the City had been discharging raw sewage into the Pacific Ocean during storm events, and this narrative standard is EPA’s hook for pursuing enforcement action against the City.

EPA argued that it included the narrative standards in the permit in question because the agency lacked the information necessary to develop numeric limits, because the City failed to provide requested information. EPA argued that it only includes narrative standards if necessary because the agency lacks information needed to develop numeric limits.

The City argued that EPA’s inclusion of narrative standard went beyond what’s allowed under the CWA, asserting that the CWA contemplates more predictable, specific numeric effluent limits.

During oral argument, several justices seemed inclined to allow narrative standards but only in certain circumstances, including where the agency lacks sufficient information despite making reasonable attempts to obtain said information from the regulated entity.

How does this case have the potential to set a national precedent, particularly in the debate over “narrative” vs. “numerical” pollution limits, impacting cities and industries nationwide?

The case has the potential to significantly change how states and EPA draft discharge permits, even if the Supreme Court issues a narrow ruling that only implicates general permits issued under the CWA, rather than individual permits that are tailored to a specific facility. General permits are quite common, as is the inclusion of narrative standards in both General and individual permits.

Questions posed by Justice Alito and others during oral argument suggest that the court may issue a limited ruling that narrows the use of narrative standards to when the agency doesn’t have enough data to develop numeric effluent limits. If that occurs, EPA or states may need to show that they lack sufficient information or otherwise justify why a narrative standard is appropriate. This would likely mean that agencies would need to put more work into determining exactly how specific pollutants should be limited.

EPA’s counsel seemed to suggest that a ruling that only authorized narrative standards in some circumstances would be appropriate, stating that the agency doesn’t include generic standards if they have enough information to craft numeric standards. But that hasn’t been our experience. We’ve seen agencies include narrative standards as boilerplate permit language. They often include narrative standards in addition to numeric effluent limits, so that the narrative standard acts like a catch-all. And even if a specific numeric effluent limit is exceeded, agencies will also assert a violation of the narrative standard. If agencies are required to justify the inclusion of narrative standards, fewer narrative standards would appear in permits and the regulated community would potentially have greater certainty in understanding what it can and can’t do under a permit.

Are unclear effluent discharge limits a challenge nationwide? What more could be done to help reduce regulatory uncertainty and support more effective compliance strategies?

These types of permit limits are much more broadly used than came across in oral argument. In many cases they are added as a boilerplate catch-all in addition to numeric effluent limits. The effect of this is that a permittee could be in compliance with all other permit limits and still potentially have a violation of a narrative limit (or an allegation in a citizen suit) given how subjective these standards can be. Limiting the use of narrative standards could provide more regulatory clarity and favor more prescriptive numeric limits.

Depending on the result of this case, what is the potential impact on water infrastructure investments and the considerations for modernizing systems to meet specific effluent discharge standards?

Given the election results and the statements made by candidate Trump during the campaign about massive deregulation, it’s impossible to predict how the landscape will shift with respect to future EPA enforcement or regulatory changes, and how regulated entities will need to respond to such changes.