PIOGA – Derrick Docket. Written by Todd Pappasergi, PIOGA General Counsel & Vice President of Government Affairs

High Court prohibits EPA from imposing “end-result” requirements on entities discharging water.

On June 28, 2024, the U.S. Supreme Court in Loper Bright Enterprises v. Raimondo severely limited the deference and power that federal agencies possess by ruling that courts should exercise their independent judgment in deciding whether an agency has acted within its statutory authority instead of deferring to the agency’s interpretation of that statutory authority.  Earlier this month, the High Court followed up Loper Bright by even further curtailing agency power in holding that federal agencies do not have the power to include “end-result” provisions in permits unless explicitly authorized by the enabling statute.

The case,City and County of San Francisco v. EPA, centered around San Francisco’s NPDES permit for one of its combined sewer overflow (CSO) and attendant discharge of pollutants into the Pacific Ocean during significant rain events.  The NPDES permit, authorized under and written pursuant to the Clean Water Act, had for over two decades prescribed the controls and limitations placed on San Francisco in order for the pollutant discharge to be proper under the CWA.  Then, in 2019, EPA and the California Regional Water Quality Control Board approved a new permit that placed two “end-result” mandates on San Francisco.  These end-result mandates placed liability onto San Francisco for violations of water quality standards even if all limitations and controls found in the permit were otherwise followed.

In a 5-4 decision, the Court found these end-result mandates to be in violation of the plain language of the Clean Water Act.  Writing for the majority, Justice Alito wrote, “what steps a permittee must take to ensure that water quality standards are met is the EPA’s responsibility,” and it is unlawful to flip that responsibility to the permit holder.  Put differently, EPA and its attendant state agencies, must place into each individual NPDES permit the limitations and restrictions necessary for the discharged water to meet clean water requirements.  To require otherwise would impose a backward-looking approach, which Congress explicitly abrogated when the Clean Water Act replaced the Water Pollution Control Act in the 1970s.

While theSan Francisco decision is confined to the Clean Water Act, NPDES permits, and EPA, it certainly has the potential of having impacts beyond these facts, especially given the permitting complexity associated with environmental legislation, regulation, and policy.  Often times, permits are authorized and written in a manner of restricting or limiting the permittee’s conduct as opposed to demanding adherence to standards in broad terms.  Whether federal and state agencies will therefore impose more complex and detailed permits in response is yet to be seen.  Regardless, permitted and regulated industries and businesses will know exactly what is required of them, therefore opening the road for more fair and effective compliance and enforcement while removing the guessing game that is often times played and lost by industry.

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