How a San Francisco waste permit dispute could further curtail the EPA’s legal authority
How a San Francisco waste permit dispute could further curtail the EPA’s legal authority
The Democratic stronghold’s case could provide guidance in a post-Chevron world
A lawsuit over permit restrictions that aim to keep San Francisco’s sewage system from overflowing into the city’s namesake bay has provided the U.S. Supreme Court with the latest chance to curtail the authority of agencies like the Environmental Protection Agency.
The lawsuit, the first environmental case to be heard by SCOTUS in its fall term, comes months after the high court took a sledgehammer to the decades-old Chevron doctrine that gave agencies like the EPA deference when writing rules based on vague laws.
The latest case, San Francisco v. EPA, focuses on the city’s National Pollutant Discharge Elimination System (NPDES) permit, which includes generic restrictions saying the city’s wastewater treatment system “shall not cause or contribute to a violation of any applicable water quality standard.”
San Francisco has argued that, under the Clean Water Act, it should only be held liable for specific discharges from its facilities, not general water quality concerns in nearby waters. The position has attracted the support of several industry trade groups and other municipal water departments with similar concerns that the vague permit provisions could cost them billions.
Brian Bell, an attorney at the law firm Dorsey & Whitney who represents investor-owned utilities and others before regulators, told Landmark the Supreme Court seemed especially concerned with the policy implications of their eventual decision when hearing oral arguments in the case earlier this month.
And if that bleeds into the eventual decision, Bell said it could send an important signal to judges across the country.
“If the decision is heavily policy-based, it could give lower court judges more free reign after the fall of Chevron to consider the policy behind regulations, not just the text of what the statute says,” he said.
A post-Chevron world
The San Francisco case is being considered months after the Supreme Court’s landmark decision in Loper Bright Enterprises v. Raimondo this past June, when the justices overruled the long-standing Chevron doctrine and held that courts “must exercise their independent judgment in deciding whether an agency acted within its statutory authority.”
Prior to the decision, courts typically deferred to agency decision-making when laws were unclear or ambiguous, so long as the federal agency’s decisions were reasonable.
San Francisco, whose case was dismissed by the 9th U.S. Circuit Court of Appeals in 2023, argued in a brief before the high court that the Clean Water Act only specifically allows regulators to issue permits that address specific point sources of pollution like pipes.
A lot of money is on the line, too, since even unintentional violations of NPDES permits can lead to criminal and civil penalties costing millions or billions of dollars. And the results could impact any number of other American cities that are worried the costly maintenance of their wastewater systems may fall short and trigger those penalties.
The city has also received the support of major fossil fuel and industry groups including the National Mining Association, American Farm Bureau Federation and American Fuel & Petrochemical Manufacturers.
The EPA meanwhile has argued that the Clean Water Act clearly supports the agency’s ability to issue permits with broad requirements to protect waterways. The EPA said San Francisco releases an estimated 196 million gallons of combined sewage and storm water into nearby waters each year, leading to elevated levels of bacteria and “no swimming” warnings.
Wyatt Kendall, an attorney at Morris, Manning & Martin who represents real estate interests and others with environmental compliance and permitting, told Landmark that he expects the court will “move the ball forward” on questions of regulator power with the case, building on the Loper Bright decision.
“You really are seeing a court that takes a very limited view of federal agency power and really wants — and is focused on — providing the regulated community with absolute clarity on compliance,” he said.
The other shoe
That clarity may come with a price for regulated entities, whether they are cities like San Francisco or major developers and industries that have weighed in on the case.
Kevin Minoli, an attorney with the law firm Alston & Bird, told Landmark that while San Francisco is fighting over an individual permit, the Supreme Court’s decision could impact the ability of EPA and the states to issue general permits as well. Instead of a painstaking process wherein EPA officials set site-specific pollution levels, Minoli said the general permits allow permitting authorities to rely on broad restrictions that can be issued more quickly and cover more dischargers than issuing individual permits.
And if the general permit provisions are trounced by the Supreme Court, it is likely that regulators will take longer to issue the permissions needed by developers to get started on major developments.
“We may end up moving a lot of people to individual permits and that's not a good solution because the EPA and the states do not have enough resources,” Minoli said. “It’s not good for industry, and it’s not good for the environment because not enough resources are available to adequately analyze permit proposals.”
“It will be a lot slower, a lot more expensive and there will be more restrictions,” he continued.