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- Rewriting the Rules: The Supreme Court's Landmark Decision on Clean Water Act Permits
In this episode of Digging Into Land Use Law, Byron Gee, Willis Hon and Sara Johnson review in detail the recent Supreme Court opinion in City and County of San Francisco vs. EPA and its implications for Clean Water Act permittees. They discuss both the immediate fallout of this recent opinion and what may come next from the Environmental Protection Agency (EPA) in the world of Clean Water Act discharge permits. As EPA and states conform their permitting regimes with this new case, there will almost certainly be significant impacts to the manner in which wastewater and stormwater permittees must comply with the Clean Water Act across the county.
Transcript: Rewriting the Rules - The Supreme Court's Landmark Decision on Clean Water Act Permits
0:00:00.4 Byron Gee: In March 2025, the United States Supreme Court issued a landmark decision in the City and County of San Francisco versus the Environmental Protection Agency. This pivotal ruling struck down the so-called end result requirements commonly imposed by the EPA and Clean Water Act permits, fundamentally reshaping how permits under the National Pollution Discharge Elimination System are administered across the country. With the potential to alter water quality compliance for permit holders nationwide, this decision raises key questions about the future of environmental regulations and the interplay between federal and state oversight. In this episode of Digging Into Land Use Law, we break down the Supreme Court decision, unravel the main issues at stake in the case, and explore the immediate and long-term impacts for stakeholders from individual permit holders to state and federal regulators. If you're navigating Clean Water Act compliance, interested in regulatory shifts, or simply curious about how this ruling will influence water quality standards, this podcast will provide insight and guidance for the road ahead.
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0:01:28.4 Speaker 2: Welcome to Digging Into Land Use Law, Nossaman's podcast covering the development of all things in, on, or above the ground.
0:01:44.5 Byron Gee: I am Byron Gee, a partner in Nossaman's Water Practice Group, and I'm joined today by fellow partners Willis Hon, also in the Water Practice Group, and Sara Johnson in our Environmental and Land Use Practice Group. Let's start by discussing the Supreme Court case. Willis, can you summarize the pivotal issues at stake in the City and County of San Francisco versus EPA case?
0:02:12.5 Willis Hon: Thanks, Byron. Well, so this was a case in which the U.S. Supreme Court decided it in March of 2025, and in that case, they analyzed the permit requirements that the EPA had been routinely using in many of its discharge permits issued under the Clean Water Act. Under that act, dischargers need a permit under the National Pollution Discharge Elimination System, or NPDES program, in order to discharge contaminants into waters of the United States. Then these permits often include specific numeric effluent limitations or may contain narrative limitations, such as having permittees implement certain best practices. The case here dealt with another type of permit requirement commonly known as end result provisions. Specifically, this case involved an action by EPA against the city and county of San Francisco to enforce these end result permit requirements for the city's oceanside combined waste water system. The permit at issue in this case involved the prohibition against discharges that, quote, contribute to a violation of any applicable water quality standard, end quote, for receiving waters, as well as a second prohibition against performing any treatments or making any discharges that, quote, create pollution, contamination, or nuisance as defined by California Water Code Section 13050, end quote.
0:03:37.4 Willis Hon: Now, these limitations, as you see here, don't direct the city to take any specific steps on how to comply, but instead rely on the city to reach the end result being required. So after this lengthy case, the Supreme Court sided with the city holding that the Clean Water Act does not authorize EPA to include such vague end result provisions in its NPDES permits. The majority opinion explained that the enforcement responsibility for determining and implementing steps to achieve water quality standards falls within the EPA's mandate and cannot be shifted onto permittees through general outcome-based language like this. Specifically, the majority opinion found that the Clean Water Act does not authorize EPA to impose requirements that condition the permittees' compliance on whether, you know, the receiving waters meet applicable water quality standards, holding that such end result limitations neither fit the statutory interpretation envisioned by the Clean Water Act, nor was it supported by the legislative history behind the Clean Water Act's adoption in 1972. Since the time of the decision about two months ago now, the case has been remanded down to the Ninth Circuit to figure out how the EPA is going to administer the permit with this new guidance, and that's the big question that a lot of people are trying to figure out right now.
0:05:03.3 Sara Johnson: Thanks, Willis, and thanks, Byron. Good to be joining you guys for this discussion. There's a lot of speculation in different directions and stakeholders viewing this opinion from different opportunities. And just looking again at the case, so we have EPA, SCOTUS directing EPA to be more specific about what permit holders can and cannot do, what actions they can take. So EPA needs to propose specific options in those conditions. And EPA also needs to be able to demonstrate that those options have a nexus to water quality. And so several of the companies that I work with, they are offset providers. They sponsor and establish ecological restoration offsets, which essentially, for anyone that's working in the environmental space, are doing something offsite to provide ecological uplift that compensates for or mitigates offsets, permitted actions and impacts elsewhere. But you have a nexus back to the permitted action based on a certain service area. So in the water quality space, that's typically a specific watershed or a HUC within a watershed. And so we're viewing this decision where EPA is needing to come up with a menu of different options that are specific actions a permittee could take.
0:06:33.8 Sara Johnson: And we're seeing water quality offsets as a really attractive option. It allows the permittee to not have to perform actions and minimize pollutants to the maximum degree at their facility, but gives them some flexibility to find a more cost effective option that maybe is even more impactful for the watershed as well by turning to some of these offsite solutions. So we see this as a real opportunity. Of course we'll need EPA to come out with guidance that clearly outlines where trading is an option. And I think several of these companies are hoping that this second Trump administration would be open to that. We saw during the first Trump administration issuance of a water quality trading memo that came out in February 2019. It outlined a bit of a roadmap on actions that EPA could take as well as ways to support the states to embrace water quality trading as a more efficient method to achieve their NPDES targets. And really, besides the memo coming out, we didn't see much action on the part of EPA to implement that or states necessarily reacting to it. And so the second Trump administration presents an opportunity to pick that work back up. And maybe it's the confluence, this decision, that interest from the first administration that results in water quality trading emerging as a real option coming out of the decision. So still though waiting, back to that first question we were talking about, still waiting though for final direction and guidance from EPA. And that's definitely what's going to be needed in the short term here for us to know what to expect and for stakeholders to really understand what this decision means.
0:08:34.3 Willis Hon: I'm totally in agreement. For a lot of the clients that we have that hold these NPDES permits and are trying to figure out what to do next, we've been recommending that they do try to continue to comply with the terms of the existing permit. As you mentioned, there's a lot of uncertainty what's going to happen. But these end result permits are only one set of provisions within the overall permit. There's still the effluent limitations, still the narrative and best practice requirements. And so those are still in place, which is important to keep in mind that we're only talking about one aspect of the NPDES program. In the long term, the permittees might find that as they're renewing these permits or as these are evolving or when EPA can get to them, you might see some more long term changes on how the types of limitations are being placed and what they are. So it might get easier, but it also might be fashioned in a way that makes it harder to comply with or more expensive. So it's really going to be wait and see for the long term.
0:09:42.9 Byron Gee: And a lot of these permits, I mean, when we're talking about industry sector permits, they have to be renewed once every five years. And so I guess EPA can't just sit on their hands or the states can't sit on their hands and just hope that something new comes along. Evidently I think they will have to come up with something fairly quickly if they are to follow their schedule of renewing these permits every five years.
0:10:16.0 Willis Hon: Right. And one of the, you know, one of the arguments made during the case is that, you know, by EPA in the case is that these end result limitations are really necessary because a lot of the times they don't have the science completed to support a specific, a more specific requirement in that context. And so a large part of it is that you need to do the work, put in research, the science to develop and craft limitations that are more specific. And so now that we have this decision, the challenge is really on EPA to now do the science and craft these, which is much easier said than done.
0:10:58.7 Sara Johnson: Yeah, and again, goes back to just some of the challenges they're facing with this reduced workforce, you know, are there other cooperative approaches or partnerships they can pursue to get that data? But definitely need more data to have defensible permit conditions that would replace those end result provisions.
0:11:23.7 Byron Gee: Okay. Thank you. That was very helpful. Let's focus in on maybe some of the broader impacts of this Supreme Court decision. How are different stakeholders viewing the long term impacts of this decision? Sara, that might be one for you to start with.
0:11:45.6 Sara Johnson: Yeah, thanks. And I'll caveat this with, this is some speculation. And coming from the perspective of several of the companies that I work with who are in the business of providing ecological offsets, essentially offsets for compliance with Clean Water Act and other state and natural resources laws, and where they have found success is working with permit holders to provide these offsite water quality projects that are still within a certain watershed. They're still within a defined service area. Typically it's a HUC. So there would be a nexus to the facility that's holding the permit. And they're seeing an opportunity with this decision and the Supreme Court's direction to EPA to do their job and to come up with what are the specific permit conditions a permittee has to comply with to show they're meeting the terms of the NPDES program and reducing pollutants overall in the receiving waters. And we're looking at these offsite offsets as a specific action that could be pursued where you can demonstrate, okay, permittee, you've checked the box on your liability. You've pursued a specific permit action. And EPA and the states can say, we're also holding up our obligations under the act because we can demonstrate that these offsets are measurable towards improving water quality by reducing certain nutrients. So we're seeing this as a potential opportunity. You know, offsets would be just one option of many, but we're feeling that they should be one that's really considered as a menu of options to try to achieve compliance. So that's just one perspective. And I'll add that the first Trump administration actually issued a guidance memo in February of 2019 where they really were trying to incentivize and outline actions EPA could take as well as ways to incentivize the states to embrace this water quality trading approach as a way to more efficiently achieve some of these pollutant goals. So there is some precedent from the first Trump administration offering support, and this is just an item, you know, we'd love to see if there was that guidance from EPA in response to the decision.
0:14:28.6 Willis Hon: Yeah, totally agree. One of the other major stakeholders that are impacted by this beyond permit holders, is, as you mentioned, the states. Now, in this specific case between San Francisco and EPA, there's also concurrently oversight from the State Water Resources Control Board that has their own permitting authority that's not only concurrent with that of EPA under the Clean Water Act, but California has its own water quality control laws. And so there's a state regime as well. Now, it's a bit complex to figure out how that's going to be implemented. While the case has come down from the Supreme Court as being remanded to the Ninth Circuit, there's also concurrently a state action challenging similar end result requirements found in the state permit as well, but that case has been on hold until the federal side of the House is resolved at the Ninth Circuit. And so we'll see what happens there. One of the things that we've seen in California from the State Water Resources Control Board is that they've been focusing a lot on these numeric limitations where there's adequate data and support for them. And so in light of this decision, maybe that sort of furthers that shift towards that strategy. One other piece of thing that I'd want to note to take a look at is Senate Bill 601 that's currently in legislature. This is a bill introduced a few weeks ago that would sort of revamp the state authority and approach on clean water quality and sort of fill in the gaps where the federal government has pulled back. And so that bill is currently making its rounds through the different committees in the state Senate and something to keep an eye on.
0:16:25.2 Sara Johnson: Yeah, definitely. I know I've been working with some folks also tracking that bill and understanding the intent where it's trying to fill the gap and further bolster water quality oversight, but I know it also has some concerns just about practical implementation challenges. And so what are the lessons learned from this case that could be avoided by states also trying to work on writing their own water quality permits? And I think one of those big lessons, and you touched on this too, Willis, is there seems to be this shift from the narrative provisions to numeric and having that focus on any water quality trading requirements linking back to numeric limitations. And that's been critical for where we have seen trading flourish as a model, particularly in the Chesapeake Bay. You've seen that success because you have these total maximum daily loads that are based on specific pollutant targets. And so, again, you've got to have through state and federal partnership and EPA staff working together to come up with the data to support that. You also need to have states that are willing to embrace trading. Again, in the Bay area, the state that's been most successful, Virginia, they had a state law that also clearly authorized this trading between point source, so your permit holders, and non-point source offsets and reductions. And so you need a couple different factors to come together, but if you can get those factors to come together, it's a really defensible option for EPA to be able to point their permittee holders towards.
0:18:21.5 Willis Hon: Yeah, so it sounds like there's a number of approaches that EPA and other stakeholders can be taking here. I think the Supreme Court case is really interesting in that it says what EPA cannot do, but it doesn't actually give much hint as to what it should be doing instead. And so with that sort of uncertainty, this is the world we're stepping into now.
0:18:47.3 Sara Johnson: The theme of the moment is that nothing is certain. You can be certain nothing is certain.
0:18:53.5 Byron Gee: And you have to address that uncertainty without any resources, which also complicates Clean Water Act compliance and the shape of permits in the future. Well, those were some very interesting insights. And I want to thank you for sharing your insight with us. And I'd also like to thank our listeners for joining us on this episode of Digging Into Land Use Law. For additional information on this topic or other environmental and land use matters, please visit our website at nossaman.com, N-O-S-S-A-M-A-N.com. And don't forget to subscribe to Digging Into Land Use Law whenever you listen to a podcast so you don't miss an episode. Until next time.
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0:19:55.7 Speaker 2: Digging Into Land Use Law is presented by Nossaman LLP and cannot be copied or rebroadcast without consent. Content reflects the personal views and opinions of the participants. The information provided in this podcast is for informational purposes only, is not intended as legal advice, and does not create an attorney-client relationship. Listeners should not act solely upon this information without seeking professional legal counsel.