COURTHOUSE NEWS: Supreme Court will hear San Francisco’s challenge to NPDES permits next week, a case with national implications

At Supreme Court next week, agency authority returns to center stage

By Kelsey Reichmann

The Supreme Court’s upcoming review of the Environmental Protection Agency’s regulatory authority over wastewater discharge pollution is likely to highlight bitter divides over the court’s role in the democratic system.

“Given the makeup of this Supreme Court and in the aftermath of the Loper Bright decision, the court will be less willing to give EPA any sort of deference with respect to their interpretation of the Clean Water Act,” Wyatt Kendall, a partner at Morris Manning focused on environmental regulatory processes, said in an interview.

In June, the conservative majority abandoned agency deference, overturning four decades of precedent on government authority.

Disagreements over agency rulemaking have already caused tension on the bench.

“Are we to conclude that an agency exceeds its statutory authority whenever it fails to choose what we think is the best meaning of a statutory term?” Justice Ketanji Brown Jackson, a Joe Biden appointee, asked during the court’s review of ghost gun regulations.

Next week, the court will shift its attention to San Francisco, which challenged the EPA’s authority to condition National Pollutant Discharge Elimination System permits on discharges that don’t negatively impact the quality of the receiving waters. To give wastewater plants certainty of their compliance, the city and county say the agency must delineate specific pollutant limits.

Nested under the Clean Water Act, NPDES lets wastewater plants release pollution into navigable or ocean waters. The EPA calculates permitting conditions based on technology and impact on water-quality standards.

The technology conditions are based on the plant’s mechanics, pushing them to implement better technology. These regulations are quantified as effluent limitations — restrictions on quantities, rates, and concentrations of chemical, physical biological and other constituents discharged from plants.

If technological advancements aren’t enough to prevent environmental damage, the EPA implements additional requirements. In San Francisco’s case, the agency prohibits wastewater discharges that cause or contribute to reductions in quality for the receiving water.

The city compares effluent limitations to a soup recipe — arguing a chef would be more successful with a list of ingredients that go into a pot, rather than simply an instruction to avoid making the soup too salty.

San Francisco said effluent limitations ensure that dischargers are only responsible for their contribution to a body of water.

“As the City and County of San Francisco (San Francisco or the City) can attest, the Environmental Protection Agency (EPA) has gone off-recipe, telling dischargers that they are once again responsible for the quality of the soup, rather than their individual additions to it,” the city wrote.

San Francisco said the agency needs to set effluent limits for the permit’s second prong instead of a generic prohibition.

“In lawsuits seeking to enforce such conditions, courts must decide after the fact how much permitholders should have controlled their discharges, making permit obligations ‘hopelessly indeterminate’ and impeding permitholders’ ability to assess their compliance,” the city wrote.

A group of municipalities and utilities echoed concerns about crushing civil and criminal penalties. Amanda Aspatore, general counsel at the National Association of Clean Water Agencies, said the organization’s members work to protect human health and the environment affordably for all the communities they serve.

Aspatore said regulatory uncertainty is a problem as utilities prioritize and plan for project to improve their systems. “It makes it more difficult to make the significant infrastructure investments that clean water utilities need to make,” she said.

The EPA argues that Congress gave the agency regulatory wiggle room to protect the nation’s waters because compliance with effluent limitations isn’t always sufficient. The agency said this space is particularly important when information to set limitations isn’t available.

“In this case, for example, petitioner failed to provide a long-term control plan that included accurate, up-to-date information about the design and operation of its combined sewer system and the characteristics of its discharges,” U.S. Solicitor General Elizabeth Prelogar wrote.

Instead of delaying San Francisco’s permit, the EPA said it allowed the city to update its longterm control plan and only prohibited discharges that would cause or contribute to a violation of water-quality standards.

The government said concerns over regulatory uncertainty were misplaced because utilities get notice of standards, which are also included in permit themselves.

Facilities are required to monitor water quality, the EPA said, making them the first to know if any discharge was negatively impacting water quality.

A ruling that further limits regulatory authority puts more pressure on lawmakers for concise legislation capable of surviving legal challenges. For a divided Congress, that bar is particularly high.

For “folks that were arguing to keep Chevron deference in place, one of their key arguments is that if we have to rely on Congress [to] pass these very clear, non-ambiguous statutes, then we may not get anything passed,” Kendall said. “It may be a real uphill battle in terms of passing legislation that then can be actually put into place.”

While some justices worry about usurping congressional authority, Jackson expressed concerns over Supreme Court interference.

“I’m worried about the different concern, which is about the court taking over what Congress may have intended for the agency to do in this situation,” Jackson said.

Just months ago, Justice Elena Kagan, a Barack Obama appointee, predicted a similar outcome.

“In one fell swoop, the majority today gives itself exclusive power over every open issue — no matter how expertise-driven or policy-laden — involving the meaning of regulatory law,” Kagan wrote in her Loper Bright dissent.  “As if it did not have enough on its plate, the majority turns itself into the country’s administrative czar.”