The U.S. Supreme Court got down and dirty Wednesday with a case about whether the Environmental Protection Agency’s permit for San Francisco’s aging sewer system is too vague, creating a potential landmine of billions of dollars of pollution liability.
The EPA has been at loggerheads with the “City By The Bay” in recent years over what the federal agency calls a “failing” sewer system, which, like those of New York, Philadelphia and other older cities around the country, collects both rain and sewage into the same pipes.
During dry spells in Northern California, that isn’t a problem since there’s enough room to first filter and treat the sewage at treatment plants. But after heavy rains, the volume is simply too great and much of its ends up being pumped directly into the San Francisco Bay and Pacific Ocean.
Each year, San Francisco discharges nearly 200 million gallons of sewage and stormwater into the ocean near to the city’s beaches and coastal waters.
The case at the Supreme Court involves a 300-page permit EPA issued under the federal Clean Water Act setting various limits on San Francisco’s “oceanside” discharges, and, in particular, a sewage outfall located 3.3 miles off the coast that falls under federal jurisdiction.
According to San Francisco, the federal permit contains “generic” prohibitions on violating applicable water standards without specifying exactly how much pollution can occur. Including such vague language in the permit, the municipality protests, would expose it to steep liability under the Clean Water Act any time water standards dropped, even if it were not responsible for the pollution.
Under the Clean Water Act, EPA wastewater permits must only include “effluent limitations,” or limits on specific pollutants, the city says. In conditioning San Francisco’s permit on not exceeding water quality standards, the agency exceeded its authority under the statute, Tara M. Steeley, an attorney for the city, argued in court Wednesday.
“What I’m asking is for clear guidance to permitholders about what we have to do to comply with our permit,” Steeley said.
Steeley added San Francisco’s fears of facing huge liability are rational given that the EPA has recently filed an enforcement action over wastewater discharges into San Francisco Bay, which are governed by a separate permit containing similar generic language.
“My colleagues here have calculated the numbers for the amount sought in the litigation for the Bayside permit and it comes to $10 billion,” she said. “That’s the statutory penalties for the days at issue.”
Several of the court’s conservative members, including Justice Brett Kavanaugh, appeared ready to embrace San Francisco’s argument.
“The problem is you can go after an individual entity, like the City of San Francisco, based on the past when they didn’t know what the relevant limitation on them was and seek retroactively, without fairness, huge penalties, including criminal punishment,” Kavanaugh said.
Chief Justice John Roberts Jr. added further support, saying Congress had amended the CWA to shift from a regulatory scheme focused on water quality standards to one focused on controlling the amount of pollutants being discharged at individual sources.
“I thought the whole reason we have the water permit system is because the water quality system was a failure,” Roberts said. He wondered how the EPA could “allocate responsibility” for poor water quality standards in areas with more than one polluter.
The three liberal justices on the court, however, appeared unconvinced.
“You’re making a policy argument to either the agency or Congress,” Justice Elena Kagan told Steeley. “What in the statute prevents the EPA from doing this?”
To hear the EPA tell it, the city’s objections to the vague permitting language are its own fault. An attorney representing the agency, Assistant to the Solicitor General Frederick Liu, said San Francisco has, for years, resisted efforts to obtain the necessary information that the EPA would need to set more specific effluent limitations.
“We’re talking about where do the flows go? What’s the conditions of the pipes and the pumping stations? How does the system respond to wet weather events? That’s the information that we’ve been lacking for the past ten years and that we asked San Francisco to provide as part of the long-term control update,” Liu said.
“Without that information, we’re basically flying blind as to how we’re going to tell exactly what San Francisco should do to protect water quality,” he added.
Liu said eliminating generic permit conditions like the one at issue here would actually harm permit holders, as it would lead the EPA to deny or delay applications while it held out for more information.
“The whole point of the general permit is that the dischargers can get away with not providing us a lot of information,” he said. “That’s how you get a construction site approved in 14 days.”
During Liu’s presentation, Justice Samuel Alito Jr. floated a narrower ruling that would preserve the EPA’s ability to issue generic conditions like the one at issue in this case so long as the “regulated party has refused to provide the information.”
That may be an “appropriate disposition” of the case, Alito offered.
A divided panel of the U.S. Court of Appeals for the Ninth Circuit upheld the EPA’s “generic” permits last year, prompting San Francisco’s successful request for Supreme Court review.
The Ninth Circuit’s decision “authorizes EPA and states to eviscerate the protections of the CWA’s Permit Shield,” San Francisco wrote in its petition for review filed in January by city lawyers and the law firm Beveridge & Diamond.
While this Supreme Court case was pending, the municipality was sued by the EPA for allegedly violating its separate permit conditions for discharges into San Francisco Bay.
According to San Francisco, that separate action risks hundreds of millions of dollars in penalties and potentially billions of dollars in injunctive relief. And while that action involves the city and county’s bay sewage system, the EPA could amend its complaint to target San Francisco’s discharges into the ocean, the city stated in supplemental papers filed at the Supreme Court after the enforcement action was filed.
But Kagan used the enforcement action as an example of how San Francisco should be on notice about complying with the applicable state water standards.
“There’s a California water quality standard that says waters shall not contain floating material in concentrations that adversely affect fishing and swimming,” Kagan said.
“And it turns out EPA says that, notwithstanding that standard, San Francisco has left lots of toilet paper floating in Mission Creek,” she added. “I mean, that’s not a ‘we don’t know what to do’ issue. Like, we know you’re not supposed to leave toilet paper floating in Mission Creek, don’t we?”
A decision is expected by July in City and County of San Francisco v. EPA, No. 23-753.