When the Supreme Court issued its decision in City & County of San Francisco v. EPA on March 4, 2025, it may have saved San Francisco $10 billion dollars in penalties sought by the United States Environmental Protection Agency (“EPA”). The decision may also precipitate significant changes in how Clean Water Act (“CWA”) permits are drafted and enforced.
The case concerned San Francisco’s CWA permit to operate its combined sewer-stormwater system and to discharge to the Pacific Ocean. City & Cty. of San Francisco v. EPA, No. 23–753, slip op. (U.S. Mar. 4, 2025). EPA renewed San Francisco’s permit in 2019 but included two conditions that the Supreme Court called “end-result” terms because they prohibited San Francisco from impairing Pacific Ocean water quality. San Francisco objected, claiming that it could never know whether it was complying with the permit.
After a lengthy legal battle, the Supreme Court held that EPA does not have authority under the CWA to include permit terms that measure compliance by end-result pollutant levels exceeding water quality standards in receiving waters. Instead, EPA must identify specific effluent limits in the CWA permit itself, so a permit holder knows what it must do to comply.
Background
It is unlawful to discharge pollutants into bodies of water covered under the CWA without a permit, known as a National Pollutant Discharge Elimination System (“NPDES”) permit. Permit terms vary, including “effluent limitations” (which restrict the quantity, rates, and concentrations of pollutants in the discharge), and “narrative requirements” (which describe other specified practices to reduce pollution like testing and reporting). So long as a permittee complies the terms of its permit, the permittee may use the CWA “permit shield” as a defense against liability under the CWA.
San Francisco uses two wastewater treatment facilities to decontaminate mixed wastewater and stormwater (the “Oceanside” and “Bayside” facilities). During periods of heavy rain, however, untreated wastewater can overflow San Francisco’s treatment facilities and discharge into either the Pacific Ocean or San Francisco Bay.
In 2019, EPA renewed San Francisco’s NPDES permit for Oceanside but included two new “end-result” limitations. First, San Francisco could not “contribute to any violation of any applicable water quality standard” in receiving waters for its discharge. Id. at 2. Second, San Francisco could not treat its wastewater or discharge in a way that “create[s] pollution, contamination, or nuisance” as those terms are defined under California law. Id. (citing California Water Code Section 13050). San Francisco asserted that these permit terms were too vague to be authorized by the CWA and challenged the permit.
San Francisco’s appeal unsuccessfully wound its way through EPA’s Environmental Appeals Board and then the U.S. Court of Appeals for the Ninth Circuit before finally landing with the Supreme Court. There, San Francisco was joined by many supporters, including but not limited to other municipalities who operate similar systems under NPDES permits, including New York, the District of Columbia, Boston, and Buffalo, as well as the National Mining Association, the National Association of Homebuilders, the Hayden Area Regional Sewer Board, and the Local Government Legal Center. Id. at 2. The stakes were high for San Francisco. Failure to comply with NPDES permit terms carries civil and criminal penalties, and in 2024, EPA and California sued San Francisco claiming up to $10 billion in penalties for permit violations. Id. at 14-15.
The Majority Rejects End-Result Limitations in CWA Point Source Discharge Permit
Justice Alito delivered the opinion of the court, joined by Chief Justice Roberts and Associate Justices Thomas, Kavanaugh, and Gorsuch. (For those keeping score, this is the second major CWA decision authored by Justice Alito in the last two years. SeeSackett v. EPA, 598 U.S. 651 (2023).) The court held that end-result permit terms are unauthorized under Section 301(b)(1)(C) of the CWA, codified at 33 U.S.C. § 1311(b)(1)(C). Looking to the history of federal water pollution legislation, the court affirmed Congress’ assessment that it is impractical to look first to a polluted body of water and then “work backward and prove that a particular entity should be held responsible for the problem.” Id. at 4 (citing EPA v. California ex. Rel. State Water Resources Control Bd., 426 U.S. 200, 202 (1976)).
In Part I, Justice Alito traced the history of the CWA, the function of NPDES permits in CWA enforcement, the applicability of EPA’s Combined Sewer Overflow (“CSO”) Policy, and the procedural history of San Francisco’s legal challenge to the Oceanside permit terms.
In Part II, all justices except Associate Justice Gorsuch agreed that San Francisco was clearly wrong when it argued that under CWA § 1311(b)(1)(C), all “limitations” in an NPDES permit must be “effluent limitations.” Instead, the court determined that EPA may include narrative requirements, in addition to effluent limitations, because the CWA authorizes EPA to include “effluent or other limitations” in NPDES permits. Id. at 8 (emphasis in original).
In Part III, Justice Alito held that CWA § 1311(b)(1)(C) “does not authorize EPA to impose NPDES permit requirements that condition permitholders’ compliance on whether the receiving waters meet applicable water quality standards.” Id. at 9-10. Instead, EPA must “set rules that a permittee must follow in order to achieve a desired result, namely, a certain degree of water quality.” Id. at 10.
The court analyzed the text and history of the CWA and noted that CWA’s permit shield would be “eviscerated” if EPA were allowed to impose “a permit provision making the permittee responsible for any drop in water quality below the accepted standard.” Id. at 15. Further, the court found that end-result terms are not what Congress intended when it enacted CWA to resolve lingering enforcement concerns from prior enforcement rules because most bodies of water receive discharge from more than one discharger. “It is hard to believe that the 1972 Congress used § 1311(b)(1)(C) to perpetuate (in camouflaged form) the backward-looking enforcement scheme in the prior version of the [pre-1972 Water Pollution Control Act],” wrote Justice Alito. “[T]he pre-1972 enforcement scheme made it necessary for federal authorities to “unscramble the polluted eggs after the fact.” Id. at 16.
In Part IV, the court addressed—and rejected—EPA’s final three arguments in favor of including end-result conditions in NPDES permits. First, EPA maintained that end-result limitations are optimal when it lacks information to develop other effluent limitations. The court rejected the argument because EPA has the requisite expertise and resources to determine what a permittee must do, as well as “ample tools” to obtain necessary information. Id. at 17.
Second, EPA contended that agency guidance for CSO’s includes language authorizing end-result terms, but the court disagreed. Citing to the recent Loper Bright decision, Justice Alito wrote that the court is “not obligated to accept administrative guidance that conflicts with statutory language it purports to implement.” Id. at 19.
Last, EPA argued that rejecting end-result conditions would disrupt businesses relying on general permits. Yet the court found this argument uncompelling where no amicus briefs supported EPA’s claim. Id. at 2.
The Dissent
Associate Justice Barrett dissented in part, joined by Associate Justices Sotomayor, Kagan and Jackson. Justice Barrett wrote that the theory embraced by the majority in Part III was “weak,” “puzzling” and “contrary to the text” of CWA. Id. (Barrett, J., dissenting).
According to the dissent, the majority’s holding that the CWA does not authorize end-result limitations is “a theory largely of their own making” that is not grounded in the statute. Id. CWA requires that permits contain technology-based effluent limitations, and if those are insufficient, the permit must also contain “any more stringent limitation, including those necessary to meet water quality standards, . . . or required to implement any applicable water quality standard.” Id. San Francisco’s Oceanside permit contains technology-based effluent limitations, but because those are insufficient to achieve the desired water quality and because the system had “allegedly led to serious breaches of the water quality standards, such as ‘discoloration, scum, and floating material, including toilet paper, in Mission Creek,’” the dissent viewed the additional end-result limitations as a proper exercise of EPA’s supplemental statutory authority to impose “any more stringent limitation.” Id.
“The entire function of [the CWA] is to ensure that permitted discharges do not violate state water quality standards,” wrote Justice Barrett. “Why would that broad authority not allow EPA to tell permittees that they must not cause or contribute to a violation of the very standards that [CWA] serves to safeguard?” Id.
Implications of the Supreme Court’s Decision
It’s early to predict all the possible ramifications of the court’s decision, although several appear reasonably foreseeable:
- All NPDES permits under scrutiny: A large number of NPDES permits include “end-result” conditions similar to those the court invalidated. Both permittees and regulators will be scrutinizing permits and assessing impacts in the coming months. As the majority opinion indicates, regulators also may exercise the tools necessary to obtain information to develop appropriate effluent limitations. Id. at 17.
- Renewed focus on TMDLs: The court’s decision may renew focus on developing Total Maximum Daily Loads (“TMDLs”) for impaired water bodies and translating numeric limitations into NPDES permits.
- Guidance and policy as interim measures: Where time-intensive and scientifically onerous numeric standards setting or TMDL adoption may be years away, water quality regulators may translate narrative water quality standards into numeric limits and monitoring requirements through policy and guidance, which then may be incorporated into permits. Whether this is permitted as a matter of law will be open for discussion.
- Withdrawing a tool from citizen suit plaintiffs: CWA citizen suit plaintiffs regularly point to “end-result” conditions as one basis for showing a permittee is in violation of its NPDES permit. This approach may now be subject to challenge.
- Delay, delay, delay: When combined with actual and anticipated cuts to the federal workforce, issuance and reissuance of CWA permits may be delayed or, as Justice Barrett suggests, denied altogether. Id. (Barrett, J., dissenting). Additional work to comply with Justice Alito’s directive to do “what the CWA demands” may take even longer.
Conclusion
According to City & County of San Francisco v. EPA, CWA § 1311(b)(1)(C) does not allow EPA or a state-delegated agency to include NPDES permit conditions that measure compliance by end-result pollutants exceeding water quality standards in the receiving waters. Instead, a NPDES permit must identify specific effluent limits and steps a permit holder must take to prevent pollutants in the discharge itself.
In closing, Justice Alito wrote: “If the EPA does what the CWA demands, water quality will not suffer.” Id. at 20. As has been the case with the CWA since its inception, that may be harder than it sounds.
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