City and County of San Francisco v. Environmental Protection Agency

LII note: The U.S Supreme Court has now decided City and County of San Francisco v. Environmental Protection Agency

Issues

Does the Clean Water Act allow the Environmental Protection Agency to discipline permit-holders for violations of water quality standards without enumerating specific limits to which permit holders’ water discharges must conform?

Oral argument:
October 16, 2024
Court below:
United States Court of Appeals for the Ninth Circuit

This case asks the Supreme Court to determine if the Environmental Protection Agency (“EPA”) must impose specific limits in the permits it distributes under the Clean Water Act (“CWA”). The CWA empowers the EPA to issue National Pollutant Discharge Elimination System (“NPDES”) permits to cities and businesses that discharge waste. The City of San Francisco contends that the EPA can only establish limitations on effluent discharges under the permit, and that it lacks the authority to establish other generic requirements. The EPA counters that its authority reaches beyond effluent limitations and that it is permitted to enforce limitations on water receiving standards. The outcome of this case has profound implications on businesses’ ability to avoid legal liability, as well as the interests of local communities.

Questions as Framed for the Court by the Parties

Whether the Clean Water Act allows EPA (or an authorized state) to impose generic prohibitions in NPDES permits that subject permitholders to enforcement for exceedances of water quality standards without identifying specific limits to which their discharges must conform.

Facts

Like most cities in the United States, San Francisco operates a combined sewer system that collects both sewage and stormwater runoff. . During extreme weather, the system occasionally exceeds capacity causing a combined sewer overflow (“CSO”) that discharges pollutants into surrounding waterways. The Clean Water Act (“CWA”) requires cities that operate combined sewer systems to obtain a National Pollutant Discharge Elimination System (“NPDES”) permit to mitigate the environmental damage caused by CSOs. An operator of a combined sewer system with a NPDES permit is deemed to be shielded from CWA liability under a “permit shield,” unless they violate the limitations of the permit.

NPDES permits are typically issued by the EPA. The relevant portion of the CWA, Section 301(b)(1), contains three sections that empower the EPA to impose certain restrictions to NPDES permits. Sections 301(b)(1)(A)–(B) authorize only effluent limitations, which are any restrictions on the quantity, make-up, or rate of CSO discharge. Section 301(b)(1)(C) authorizes “any more stringent limitation, including those necessary to meet water quality standards, treatment standards, or schedules of compliance” but does not mention effluent limitations specifically.

San Francisco operates two combined sewer systems: “Bayside,” and “Oceanside.” The most recent Oceanside NPDES permit, issued by the EPA in 2019, includes two types of limitations: (1) effluent limitations that impose specific limits on the quality and quantity of CSO discharge, and (2) narrative limitations that prohibit San Francisco from violating certain water quality standards in the Pacific Ocean with their CSO discharge. The narrative limitations prohibit discharge that contributes “to a violation of any applicable water quality standard . . . for receiving waters [the Pacific Ocean],” and further prescribe that “[n]either the treatment nor the discharge of pollutants shall create pollution, contamination, or nuisance.”

Shortly after San Francisco received the Oceanside NPDES permit, it petitioned the EPA’s Environmental Appeals Board (“EAB”) to review it. San Francisco argued that, among other issues with the permit, the narrative prohibitions violated the CWA by impermissibly relying on receiving water quality standards as opposed to effluent limitations and were so vague that they did not provide fair notice of what constituted a violation. . While awaiting a decision, the EPA stayed the contested provisions of the Oceanside NPDES permit. Eventually, the EAB denied the review, ordering that the receiving water quality standards comported with the CWA because Section 301(b)(1)(C) authorized the EPA to implement any prohibition limitation “necessary to meet water quality standards.” San Francisco appealed to a panel of the United States Court of Appeals for the Ninth Circuit which affirmed the EAB’s holding for the same reasons.

San Francisco petitioned the United States Supreme Court for certiorari , seeking review of whether the narrative receiving water quality standards were permissible under the CWA. Before the Court granted certiorari, the EPA filed a lawsuit against San Francisco for violating similar narrative limitations in the NPDES permit for the Bayside combined sewer system. On May 28th, 2024, the Supreme Court granted a review of both questions.

Analysis

San Francisco argues that the CWA does not authorize the Oceanside NPDES permit’s limitation of receiving water quality standards. San Francisco contends that the regulations are not allowed under the CWA for three reasons: (1) the explicit text and structure of the CWA only allows effluent limitations, (2) the legislative history of the CWA condemns receiving water quality standards, and (3) narrative receiving water quality standards prevent permittees from ascertaining what is or is not a violation.

San Francisco asserts that Section 301(b)(1)(C) of the CWA and the overall structure of the CWA require the EPA to use only effluent limitations in NPDES permits. Although Section 301(b)(1)(C) only uses the word “limitation” in its language, San Francisco explains that various principles of statutory interpretation imply that it refers to effluent limitations. Because the prior uses of the word “limitation” in Section 301 are broadly preceded by “effluent,” San Francisco declares that effluent must also attach to the “limitation” in Section 301(b)(1)(C). To support this reading, San Francisco cites two prior Supreme Court cases, New Prime and Harrington , which it claims endorse relying on antecedent or adjacent modification of terms when interpreting them later in the statute. Further, San Francisco notes various EPA decisions and materials that have adopted this reading. Additionally, San Francisco highlights that attaching “effluent” to “limitation” in Section 301(b)(1)(C) provides a consistent shorthand, since later portions of Section 301 say “limitation” when citing to effluent limitations.

The EPA counters that regardless of the statutory interpretation principles offered by San Francisco, the Supreme Court has already read Section 301(b)(1)(C) to authorize non-effluent limitations. The EPA cites to National Association of Manufacturers v. Department of Defense which it notes held that Section 301(b)(1)(C) allowed the EPA to issue “more stringent limitations,” if “effluent limitations [could not] meet water quality standards,” and that these other limitations “[did] not fall within the precise definition of effluent limitation[s].” Given this ruling, the EPA insists that the question has already been addressed by the Court. Even if the Court’s prior language is not dispositive, the EPA claims the CWA’s language authorizes non-effluent limitations. First, the EPA argues that omitting the word “effluent” from Section 301(b)(1)(C) should be viewed as an intentional decision by Congress to allow other types of limitations. If Congress had intended for Section 301(b)(1)(C) to only authorize effluent limitations, the EPA argues that Congress would have included that modifier as they did in the surrounding sections.

LEGISLATIVE HISTORY OF THE CWA

In addition to direct statutory interpretation, San Francisco contends that the legislative history of the CWA displays why the EPA may not rely on receiving water quality standards in NPDES permits. First, San Francisco quotes Congress’ explanation of Section 301(b)(1)(C) which detailed how sources like the Oceanside sewer “could be required to meet a more stringent effluent limitation ” if the other limitations of Section 301(b)(1)(C) were inadequate. These effluent limitations, San Francisco continues to quote, “[would] be set on the basis of that reduction in the quantity and quality of the discharge of pollutants.” These legislative statements, San Francisco argues, suggest that Congress only intended to authorize the EPA to issue effluent limitations. San Francisco analogizes the narrative receiving water quality standards in the Oceanside NPDES permit to Congress’s abandoned pre-CWA regulatory approach. San Francisco recounts how most pre-CWA regulations featured prohibitions on “causing or contributing to” pollution in receiving waterways, an approach Congress ultimately abandoned because it required the impossible task of working backward from an already polluted body of water to determine which dischargers were responsible. Relying on the similarities between the Oceanside receiving water quality standards and the disfavored pre-CWA limitations, San Francisco reasons that the Oceanside NPDES permit impermissibly reverts to the pre-CWA approach. Taken together, San Francisco postulates that the only way to understand the legislative history of Section 301(b)(1)(C) is a total renunciation of receiving water quality standards like those in the Oceanside NPDES permit.

In response, the EPA instead focuses on the legislative debate between the House and the Senate over Section 301(b)(1)(C)’s adoption as evidence that it authorizes more than effluent limitations. The EPA claims that in passing the CWA, the Senate version of the bill would have eliminated water quality limitations altogether. Specifically, the EPA argues that the Senate version of Section 301(b)(1)(C) authorized only “more stringent effluent limitation[s].” Conversely, the EPA stresses that the House bill kept water quality limitations and removed the word effluent from Section 301(b)(1)(C). The EPA cites to the debate over the discrepancies between the House and Senate versions of Section 301(b)(1)(C) in which various members of the House argued that more than just effluent limitations were required to adequately maintain clean water. The EPA emphasizes that this debate resulted in the House version of the bill being adopted. Had Congress intended for Section 301(b)(1)(C) to only allow effluent limitations, the EPA maintains they would have adopted the Senate version of that Section. The EPA clarifies that the issue with the pre-CWA water quality limitations was not workability but lack of enforcement. The EPA explains that according to the legislative history of the CWA, its passage merely provided an easier enforcement mechanism for water quality limitations alongside the introduction of enforcement for effluent limitations. Further, the EPA emphasizes that the “more stringent effluent limitation” language in the legislative history is just an example of one possible enforcement mechanism but does not preclude the possibility of the EPA administering other types of limitations.

PREDICTABILITY

Finally, San Francisco insists that the CWA’s penal framework can only function fairly and as designed when section 301(b)(1)(C) is read to regulate only effluent limitations. To support this premise, San Francisco argues that the CWA’s penalties are “so severe” that they may only be warranted alongside “some measure of predictability,” which is why “Congress intended to establish clear and identifiable discharge standards.” San Francisco explains that when NPDES permits feature only effluent limitations, permittees can easily understand how to comply. However, when NPDES permits employ receiving water quality limitations, San Francisco claims that a permittee would only know if their discharge violated the limitations retrospectively, eliminating any form of predictability.

The EPA argues that the predictability concerns raised by San Francisco are not realistic. First, the EPA claims that permittees have fair notice of whether they have violated any water quality standards due to the CSO monitoring systems additionally required by NPDES permits. Additionally, the EPA describes how during a lawsuit for infringing an NPDES permit, the plaintiff bears the burden of establishing a connection between the permittees’ CSO discharge and specific adverse effects of the receiving water. This requirement, the EPA posits, makes it unlikely that a permittee will be penalized for receiving water pollution they did not actually cause. Further, the EPA notes that the Supreme Court has allowed lower courts to mitigate penalties for permittees if they have made a good-faith effort to comply with their permits. The EPA highlights how this discretion further reduces permittees’ unpredictable or excessive liability under the CWA.

Discussion

EFFECT OF THE PERMIT SHIELD’S CERTAINTY ON BUSINESSES

The National Mining Association et al. (“NMA”), in support of San Francisco, allege that the CWA’s permit shield allows permittees to design facilities accordingly to ensure the legal operation of their businesses and avoid liability under the CWA . The National Association of Home Builders et al., in support of San Francisco, explain that the implementation of receiving water limitations impairs the ability of a permittee to grasp the full extent of the permit shield’s coverage because these provisions lack specific information. According to NMA, CWA litigation imposes increased costs on permittees due to retaining consultants, experts, and laboratory testing for momentous litigation related to the CWA. The Public Wastewater and Stormwater Agencies and Municipalities (“Public Wastewater”), in support of San Francisco, argues that the reduced certainty under the EPA’s interpretation of the CWA forces public clean water utilities to needlessly and perpetually litigate the question of whether the requirements in their permit are sufficiently strict.

On the other hand, California, in support of the EPA, alleges that narrative requirements provide permittees with fair notice. California claims that permittees have advanced notice because NPDES permits extensively detail obligations, with the challenged Oceanside Permit spanning over 100 pages. Thus, California asserts NPDES permits delineate exactly what rules permittees must follow. Washington, Massachusetts, and 11 other states (“Washington et al.”), in support of the EPA, argue that in this case, San Francisco was given sufficient details to be aware of violations because the state and the EPA provided sufficient standards, which in turn provide detailed, specific limitations with which San Francisco’s discharges must comply. Environmental and Community Organizations, in support of the EPA, alleges that permittees are undeniably aware when they have violated permit limits because the government and citizens sue only when the harm is “pressing and provable”; permittees “would have . . . to actively ignore their discharges to not know that they were in violation.” ,

INTERESTS OF LOCAL COMMUNITIES

Public Wastewater, in support of San Francisco, contends that municipalities may invest significant sums on new infrastructure they believe complies with current regulations only to be potentially sued later by advocacy groups, who allege that some new limitation or action is in fact necessary to achieve compliance with water quality standards. The Local Government Legal Center, in support of San Francisco, similarly alleges that the uncertainty generated by generic permit conditions impedes local governments’ investments designed to protect the health and safety of residents. , The Hayden Area Regional Sewer Board, in support of San Francisco, explains that the EPA’s permit forces small sewer districts, like itself, to control the actions of other dischargers which it cannot do, preventing it from complying with the requisite water quality standards of the state. Hayden Area also posits that vague limitations obstruct the intended benefits to water quality.

Small Business Owners and Operators (“Business Owners”), in support of the EPA, counter that narrative permit provisions create a heightened water quality standard which adequately safeguards small businesses that rely on clean water. Specifically, Business Owners explain that commercial fish and shellfish harvesters, as well as the tourism industry, depend on clean water for their economic livelihood. Further, Business Owners argue that narrative provisions incorporating state standards best promote clean water because many pollutants, such as per-and polyfluoroalkyl substances (“PFAS”), would otherwise not be prohibited under NPDES permits. Washington et al., in support of the EPA, contend that narrative conditions best protect water quality by creating flexibility for the permittee and allowing both permittees and regulators to act quickly when tackling unanticipated issues.

Conclusion

Authors

Written by Garrett Taylor and Alexandra Fertig

Edited by Tedrick Au

Additional Resources