The Nickel Report

Can permitted, well-operated septic systems at vacation resorts give rise to liability under the Clean Water Act (CWA)? That is the question an Environmental Non-Governmental Organization (eNGO) is asking a federal district court to decide in two cases pending in Massachusetts federal court.

The facts in both cases are generally the same. The Conservation Law Foundation (CLF) is suing two vacation resorts (Resorts) claiming that discharges from their sewage disposal systems into groundwater violate the CWA. Conserv. Law Found. v. Wequassett Inn LLP, et al., No. 1:18-cv-11820 (D. Mass. Aug. 24, 2018); Conserv. Law Found. v. Longwood Venues & Destinations, Inc., et al., No. 1:18-cv-11821 (D. Mass. Aug 24, 2018). The Resorts own beachfront properties in the Cape Cod area of Massachusetts. They also own and operate large-scale sewage treatment and disposal systems that serve their hotel, residential, food and beverage, golf course and other recreational facilities. The Resorts have state-issued permits to discharge treated wastewater into leach fields via perforated pipes. The wastewater seeps into groundwater that, CLF alleges, allows nitrogen and other pollutants to make their way to nearby surface waters.

CLF filed the lawsuits under the CWA’s citizen suit provision that allows private parties to enforce CWA requirements. CLF’s argument uses the hydrological connection theory as the “hook” for CWA liability, asserting that the Resorts’ discharges into leach fields are directly connected to waters of the US via groundwater and thus subject to permitting requirements under the National Pollutant Discharge Elimination System (NPDES). CLF asks the District Court, among other things, to declare that the Resorts violated and continue to violate the CWA, order them to apply for NPDES permits, and impose civil penalties ranging from $37,500 - $51,570 per day per violation of the CWA.

In a motion to dismiss filed on November 30, Longwood Venues & Destinations argues that its sewage disposal system is not a point source and groundwater is not a water of the US It further argues that the hydrological connection theory illegally expands federal jurisdiction to include groundwater, which is typically regulated by states, and that the theory cannot be adopted absent clear instruction from Congress. CLF now has an opportunity to file a response to the Resort’s arguments.

Recently, eNGOs have started using the hydrological connection theory to impose, or attempt to impose, Clean Water Act liability on businesses. Proponents of this theory argue that discharges of pollutants into groundwater that eventually make their way to waters of the United States via a hydrological connection are regulated by the CWA. Opponents argue that groundwater is not a point source and that the CWA only regulates discharges into waters of the US from point sources. Federal district and appellate courts have issued differing opinions about whether the theory leads to CWA liability. And the US Supreme Court is currently considering petitions for certiorari that arose from decisions by the Fourth and Ninth Circuits on this issue. So, it is possible that the issue may be settled by the high Court in the near future. Until it is settled, however, businesses should expect eNGOs to use the theory to make novel arguments regarding CWA liability.

These cases highlight the fact that environmental groups will continue to use the hydrological connection theory to expand CWA liability to businesses that most people would not assume need to deal with CWA issues—such as those in the vacation resort or hospitality industry. Until the Supreme Court, Congress or the Executive branch resolves the issues raised by the theory, it will continue to add another layer of legal risk to certain business operations.

Nicholas Ramos is a Law Clerk in the Richmond office of Hunton Andrews Kurth LLP.