The US Supreme Court held in City and County of San Francisco v. EPA that the US Environmental Protection Agency lacks authority under the Clean Water Act to include “end-result” limitations in National Pollutant Discharge Elimination System (NPDES) permits. The Court reasoned that the CWA requires EPA to set a specific standard and instruct permittees on how to achieve that standard in NPDES permits. The Court’s decision renders unenforceable limitations in CWA permits conditioned on the quality of the receiving waters and again makes clear the Court will not defer to the agency’s interpretation of a statute it is tasked with implementing.
At issue in the case were two requirements written into the City of San Francisco’s NPDES permit for one of its water treatment facilities that handles both stormwater and wastewater—otherwise known as a Combined Sewer Overflow (CSO). During periods of heavy precipitation, combined wastewater and stormwater from CSOs may exceed a facility’s treatment capacity, resulting in the discharge of untreated water, including raw sewage, into the receiving water. Many US cities—including New York City, Washington, DC, Boston, and Buffalo—have CSOs.
The permit at issue concerned San Francisco’s Oceanside Facility, which treats stormwater and wastewater before discharging into the Pacific Ocean. EPA wrote two end-result requirements into San Francisco’s permit to prohibit any discharge that (1) “contribute[s] to a violation of any applicable water quality standard” for the receiving water and (2) “create[s] pollution, contamination, or nuisance” as such terms are defined by the California state water code.
In support of these requirements, EPA relied on a CWA provision (33 USC § 1311(b)(1)(C)) allowing the agency to set “any more stringent limitation” that is “necessary to meet water quality standards” or “required to implement any applicable water quality standard” established under the CWA. San Francisco argued that the CWA does not authorize EPA to impose permit requirements that condition compliance on whether receiving waters meet applicable water quality standards, and rather the CWA only allows EPA to set specific effluent limitations.
The US Court of Appeals for the Ninth Circuit upheld EPA’s terms in San Francisco’s NPDES permit, holding that CWA § 1311(b)(1)(C) authorizes EPA to impose “any” limitations aimed at ensuring applicable water quality standards are met in a receiving water. The Supreme Court reversed the Ninth Circuit’s ruling.
In a 5-4 majority opinion authored by Justice Alito, the Supreme Court read the key provision of the CWA—33 USC § 1311(b)(1)(C)—as authorizing EPA to set actual limitations that instruct the permittee on how to implement and meet that limitation. The Court based this holding on the words in the statute.
The Court interpreted the word “limitation” to mean a “‘restriction or restraint imposed from without.’” [1] End-result limitations such as those written into San Francisco’s NPDES permit are not a valid “limitation” because they “simply tell[] a permittee that a particular end result must be achieved,” leaving it up to the permittee to figure out what limitation is necessary to meet that end result. [2] Accordingly, “the direct source of the restriction comes from within, not ‘from without.’” [3]
The Court also interpreted language indicating that EPA has authority to impose a limitation that is “necessary to meet” or “required to implement” any water quality standard as a requirement that any limitations provide a “concrete plan” that “must be taken to achieve” the standard. [4] Thus, “[s]imply telling a permittee to ensure that the end result is reached is not a ‘concrete plan’ for achieving the desired result.” [5]
The Court supported its textual reading by examining the provision within the overall statutory scheme. Allowing EPA to set end-result limitations would eviscerate the CWA “permit shield” provision [6] under which a permittee is in compliance with the CWA if it follows all the terms in the permit.
San Francisco pointed out that it could take months for a permittee to detect a drop below applicable water quality standards and even longer to implement appropriate corrective measures, all the while subjecting the permittee to penalties of up to $25,000 per day per violation. The Court further pointed out the injustice of allowing EPA to impose penalties for any drop in water quality where there are multiple permittees discharging into a single body of water as is often the case.
Importantly, the Supreme Court clarified that its holding does not prohibit EPA from including “narrative limitations” expressed in nonnumerical form in NPDES permits. [7] As such, the holding in San Francisco v. EPA does not impact “general permits,” which cover certain categories of point sources. General permits are relied on by the construction and agricultural industries, among others, and include provisions requiring compliance with “best management practices” and “operational requirements and prohibitions.”
Permittees should nevertheless anticipate greater specificity in NPDES permits going forward. EPA will be unable to enforce end-result limitations based on the quality of the receiving water without providing permittees with instructions on how to achieve that standard.
Consequently, EPA will likely take longer in writing new NPDES permits given the need for greater specificity in what is already a complex permit writing process with fewer agency resources and staff available in the Trump administration. As of October 1, 2024, EPA reported a significant backlog in reissuing individual existing NPDES permits across nearly all EPA regions, with a nationwide average of 33%. This backlog is likely to continue.
Existing permits with now unenforceable “end-result limitations” may also be subject to challenges by third parties through citizen suits if permits can no longer guarantee that water quality standards are being met. [8]
The decision in San Francisco v. EPA continues the Court’s trend of curtailing agency discretion, which is consistent with last term’s landmark Loper Bright Enterprises v. Raimondo decision overruling Chevron deference.
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[1] Slip op. at 10 (quoting Webster’s Third New International Dictionary 1312 (1976)).
[2] Id.
[3] Id.
[4] Id. at 11.
[5] Id.
[6] 33 U.S.C. § 1342(k).
[7] Slip op. at 19.
[8] See 33 U.S.C. § 1365(a)(1) (allowing citizen suit against any person alleged to be in violation of any standard or limitation established under the CWA).