For decades, courts have adjudicated claims alleging that Clean Water Act Section 402 requires a permit for discharges of pollutants to groundwater, where those discharges ultimately reach waters of the United States. In recent years, courts have seen a considerable uptick in cases involving such claims. For instance, last month, a federal district court in South Carolina dismissed a case alleging that petroleum products that leaked from a pipeline into groundwater are slowly migrating toward streams and wetlands. See Upstate Forever v. Kinder Morgan Energy Partners, L.P., No. 16-cv-4003 (D.S.C. Apr. 20, 2017).

Earlier this month, dueling lawsuits were filed in federal district courts in North Carolina and Virginia focusing on allegedly unlawful discharges to groundwater from the same coal-fired electric generating plant. See Roanoke River Basin Ass’n v. Duke Energy Progress, LLC, No. 17-cv-452 (M.D. N.C. filed May 16, 2017); Duke Energy Progress, LLC v. Roanoke River Basin Ass’n, No. 17-cv-32 (W.D. Va. filed May 11, 2017).

Finally, on May 15, the Town of Marion, Massachusetts petitioned EPA’s Environmental Appeals Board to review a Clean Water Act permit, arguing, among other things, that EPA lacks authority to regulate groundwater discharges, even if groundwater is hydrologically connected to waters of the United States. See In re Town of Marion, Permit No. MA0100030 (EAB filed May 15, 2017). These cases, as well as the pending Ninth Circuit appeal in Hawaii Wildlife Fund v. County of Maui,1 will add to the substantial body of conflicting law on this subject.

District of South Carolina’s Dismissal in Upstate Forever

In Upstate Forever, environmental groups brought a CWA citizen suit following a petroleum pipeline leak in South Carolina. The groups alleged that the defendants unlawfully discharged gasoline, petroleum substances, and other contaminants from a point source (i.e., the pipeline) into navigable waters without a National Pollutant Discharge Elimination System permit under CWA Section 402. According to the complaint, leaked contaminants polluted the soil and groundwater and ultimately made their way to navigable waters via seeps, flows, fissures, and channels. The defendants moved to dismiss the lawsuit, arguing, among other things, that the discharge of petroleum products from the pipeline was neither ongoing nor a discharge of pollutants from a point source and that the CWA does not regulate discharges to groundwater, even if it is hydrologically connected to surface waters.

In granting the motion to dismiss, the Court first clarified that the plaintiffs failed to allege that the point source actually added pollutants to navigable waters, rather than simply “identify[ing] a possible point source” and alleging that “pollutants ultimately may reach navigable waters.” The Court observed that it is undisputed that the pipeline leak resulted in soil and groundwater contamination at the spill site, but it emphasized the lack of a continuing discharge from the pipeline and the absence of any facts in the complaint alleging that the “pipeline discharged petroleum directly into navigable waters.” Ultimately, the Court held that the migration of pollutants through soil and groundwater constitutes nonpoint source pollution that is “not within the purview of the CWA.” Notably, the prospect of opening the floodgate to cases applying the CWA to “every discharge into the soil and groundwater no matter its location” concerned the Court, given its view that “[a]ll groundwater potentially flows downstream and will possibly at some point enter navigable waters.”

The Court then turned to the plaintiffs’ claim that various seeps, flows, and fissures from the pipeline spill site are themselves point sources. The Court distinguished the case at hand from various cases the plaintiffs cited involving pits, holding ponds, cesspools, and coal plants by explaining that the defendants did not affirmatively channel or direct contaminants to navigable waters. In so distinguishing, the Court again emphasized that migration through groundwater constitutes nonpoint source pollution.

The Court rounded out its opinion by rejecting the plaintiffs’ claim that the defendants violated the CWA by discharging pollutants into groundwater that is hydrologically connected to surface waters. After acknowledging that district courts are deeply split on this issue, the Court pointed out that the two courts of appeals—the Seventh and Fifth Circuits—that have addressed this issue concluded that the CWA does not apply to groundwater contamination even if the groundwater is hydrologically connected to surface waters. The Court ultimately followed the holding from those two circuits (and similar holdings from other district courts), concluding that it lacked subject matter jurisdiction over the plaintiffs’ claim that the defendants violated the CWA by discharging pollutants to groundwater that is hydrologically connected to navigable waters.

Dueling Duke Energy Cases

Earlier this month, Duke Energy Progress, LLC and Roanoke River Basin Association filed competing lawsuits in the Western District of Virginia and the Middle District of North Carolina involving allegations that Duke Energy’s Roxboro Steam Station, a coal-fired utility in North Carolina, was discharging various pollutants in violation of the CWA. In accordance with the CWA’s citizen suit provision, RRBA sent Duke Energy a sixty-day notice of intent to sue on March 13, 2017, alleging, among other things, that Duke Energy unlawfully discharged pollutants from several coal ash basins and canals to groundwater that is hydrologically connected to jurisdictional waters. The day before expiration of the sixty-day notice period, Duke Energy filed a preemptive action in the Western District of Virginia on May 11, seeking several declaratory judgments that it is not violating the CWA. In particular, Duke Energy seeks declaratory judgments that: (i) the CWA does not regulate discharges to groundwater; (ii) Duke Energy’s coal ash basins are nonpoint sources of constituents picked up by precipitation and migrating groundwater that are not subject to NPDES permitting; and (iii) the CWA does not prohibit the migration/percolation of constituents from coal ash basins into navigable waters via hydrologically connected groundwater.2

Less than a week after Duke Energy’s filing, RRBA followed through on its threat to sue by filing an action in the Middle District of North Carolina on May 16. RRBA’s complaint alleges, among other things, that Duke Energy continues to unlawfully discharge pollutants from unlined lagoons into groundwater, which is hydrologically connected to jurisdictional waters. In RRBA’s view, the settling basins, dams, leaks, hydrologically connected groundwater flows, streams, and seeps, all constitute point sources under the CWA. Not surprisingly, the complaint characterizes Duke Energy’s preemptive lawsuit as a “blatant attempt to forum shop and avoid justice[.]” RRBA asserts that the CWA’s citizen suit provision requires that suits alleging unlawful discharges of pollution are to be filed in the district where the alleged source of the pollution is located, which, in this case, would be the Middle District of North Carolina.

No responsive pleadings have been filed in either case as of the date of this alert. It bears emphasis, however, that in 2015, the Middle District of North Carolina denied a motion to dismiss similar claims against Duke Energy Carolinas, LLC in a citizen suit filed by Yadkin Riverkeeper.3 There, the Court held that it has “jurisdiction under the CWA to adjudicate claims where pollutants travel from a point source to navigable waters through hydrologically connected groundwater serving as a conduit between the point source and the navigable waters.” That lawsuit ultimately resulted in a settlement obligating Duke Energy Carolinas to remove coal ash from its basins.

EAB Appeal by Town of Marion

On May 15, the Town of Marion, Massachusetts petitioned EPA’s Environmental Appeals Board to review its NPDES permit for discharges from a small wastewater treatment facility into Aucoot Cove, located in Buzzards Bay. The Town’s plant relies on unlined lagoons—located over a mile from any surface waters—to equalize wastewater and treat sludge.

One of the arguments in the Town’s petition is that EPA exceeded its CWA authority by regulating sludge that does not directly impact surface waters of the United States under the NPDES program. According to the petition, even if sludge were leaking from the lagoons into groundwater, EPA Region 1’s own findings show that it would take at least 20 years for any pollutant to migrate via groundwater to Aucoot Cove. The petition then cites the long line of cases that have held that the CWA does not regulate groundwater, even if it is hydrologically connected to jurisdictional waters. The bottom line, in the Town’s view, is that its lagoons and any related discharges to groundwater do not constitute point source discharges to navigable waters and thus, are beyond the scope of CWA regulation.

Conclusion

These recent developments illustrate that CWA litigation over alleged groundwater pollution remains active, and conflicting decisions on this issue likely will continue to pile up in the coming months and years. CWA practitioners continue to await the Ninth Circuit’s decision in Hawaii Wildlife Fund v. County of Maui. Should the Ninth Circuit affirm the lower court’s “conduit theory” of liability—which imposes NPDES requirements any time pollutants are released from a point source and eventually make their way to navigable waters (e.g., diffuse groundwater migration)—that will create an interesting split with the Seventh and Fifth Circuits on the issue of whether discharges into groundwater are subject to CWA permitting requirements. Eventually, the Supreme Court may need to interject and resolve this issue once and for all.