Justices’ Questioning Shows High Stakes for Wastewater Permits

Oral arguments at the US Supreme Court Wednesday in a case about San Francisco wastewater overflows highlighted that the eventual ruling stands to change water pollution permitting nationwide.

Even a narrow ruling in City and County of San Francisco v. EPA will have significant implications for National Pollution Discharge Elimination System (NPDES) permitting under the Clean Water Act because nonspecific permits at the center of the case are widespread, said Ashley Peck, a partner at Holland & Hart LLP in Salt Lake City.

The litigation focuses on whether the Environmental Protection Agency can require wastewater systems to comply with nonspecific, or generic, effluent limitations set in NPDES permits governing pollution from sewer overflows during storms.

The EPA has been trying to halt San Francisco’s releases of raw sewage into the Pacific Ocean during rainstorms for years, and a lack of information about the cause has forced the agency to include generic prohibitions on the impacts to water quality in the city’s permit. The US Court of Appeals for the Ninth Circuit in July 2023 upheld EPA’s authority to issue generic limits on discharges under the Clean Water Act.

“Inclusion of a broad narrative standard is boilerplate language” in many permits, frustrating many permittees because the nonspecific limits leave them open to citizen suits or agency enforcement, Peck said.

San Francisco expects EPA to force it to pay $10 billion in “crushing” penalties for permit violations, Tara Steeley, deputy city attorney for San Francisco, said in oral arguments.

The justices seemed poised to find a middle ground in the case, with Frederick Liu, an assistant solicitor general at the Justice Department, agreeing with Justice Samuel Alito that it would be acceptable for the court to rule that generic permits are acceptable only when additional technological information needed for greater specificity isn’t available.

Any ruling changing how generic narrative standards can be used “will likely mean changes for a lot of NPDES permits,” Peck said.

Justice Brett Kavanaugh said during arguments that the overarching problem San Francisco faces is that it doesn’t know what its obligations are under its vague permit, and the city is on the hook for millions of dollars in fines and potential criminal penalties.

Kevin Minoli, partner at Alston & Bird LLP in Washington, said there is likely “widespread agreement” that NPDES permits should clearly inform permittees what they can and can’t do.

The city argued that its permit must also specify how it needs to ensure that it will not violate water quality standards, but Steeley struggled to provide a clear and consistent rationale for the city’s position, Minoli said.

“That argument failed to resonate with the Justices, with some Justices expressing concern that San Francisco’s position would reduce a permittee’s ability to determine how best to ensure that its discharges would not violate the standards,” Minoli said in an email.

Need for Clarity

Dave Owen, an environmental law professor at the University of California College of the Law in San Francisco, said that Alito’s position during the oral arguments was a surprise.

“Justice Alito seemed unsympathetic to San Francisco’s position—he had a fairly harsh question about dumping millions of gallons of sewage in the Pacific Ocean—and seemed to be searching for a compromise holding that allows generic standards but limits their use,” Owen said. “He’s been rather hostile to the Clean Water Act and to EPA in some past decisions.”

Ultimately, concerns about regulatory clarity may drive the outcome of the case, especially for conservative justices, but the details of San Francisco’s situation may matter more, Peck said.

“The facts in the San Francisco case, demonstrating fairly significant water quality issues, may also be giving the justices pause and influence their interpretation of the statute,” she said.

The case is City and County of San Francisco v. EPA, U.S., No. 23-753, 10/16/24.