The Supreme Court has provided a measure of relief to local agencies facing the threat of Clean Water Act enforcement for sources of pollution outside their control.

On March 4, 2025, the Court held upheld the City and County of San Francisco’s challenge to two “narrative” permit conditions in the permit for one of the City’s combined wastewater facilities. Those conditions effectively imposed liability for any discharge that contributes to a violation of water quality standards, notwithstanding compliance with numerical effluent limitations and other permit requirements.

The Court’s opinion, authored by Justice Alito, turned on whether EPA’s authority to establish “any more stringent limitation . . . required to implement any applicable water quality standard” allows state and federal water quality regulators to impose permit conditions that mandate achieving certain results—specifically, not “contributing to a violation of applicable water quality standards” in receiving waters or “creating pollution, contamination, or a nuisance,” as defined by the California Water Code.

The Court held that imposing those permit conditions exceeds EPA’s authority, relying on the text of the Clean Water Act to interpret what constitutes a legally permissible “limitation” on discharges. The Court rejected San Francisco’s broader argument that EPA was barred from imposing narrative limits of any kind under the Clean Water Act.

Justice Alito found that EPA’s interpretation of the Clean Water Act was inconsistent with the legislative history of the statute, noting that when Congress adopted the Clean Water Act in 1972, it explicitly moved award from the unworkable “retrospective approach” of tying violations to water quality in receiving waters that was the foundation of the pre-1972 Federal Water Pollution Control Act. The Court also expressed concerns regarding the fairness of EPA’s interpretation of the statute, noting that EPA’s approach would vitiate the “permit shield” provision of the Clean Water Act, which protects permittees who comply with permit conditions from liability. Finally, the Court observed that EPA’s interpretation failed to adequately address circumstances where a water quality standard violation is caused by multiple permittees discharging into single waterbody.

The Court’s decision is notable for both its direct impact on National Pollutant Discharge Elimination System (NPDES) permits and its wider implications for judicial review of regulatory agency decisions. So-called “narrative” permit conditions are found in many NPDES permits throughout California and elsewhere, including the Municipal Regional Stormwater Permit that covers municipalities and local agencies throughout the Bay Area. While the Supreme Court’s decision does not affect other requirements of NPDES permits (including other non-numeric requirements such as reporting, recordkeeping, and best management practices), agencies should not be subject to an enforcement action based solely on an exceedance of water quality standards.

The Court’s decision is not without downsides for NPDES permittees, however. In the short term, agencies in the process of obtaining or revising NPDES permits may face delay and uncertainty as EPA and state regulators grapple with how to respond to the Supreme Court’s decision. Going forward, the absence of the backstop provided by the invalidated permit conditions may lead EPA to require more information and impose even more burdensome requirements on permittees. It will likely be some time before the net impact of the Court’s ruling on NPDES permittees becomes clear.

More broadly, the Court’s opinion provides a clear indication that the Court will not defer to regulatory agencies on questions of statutory interpretation in the post-Chevron era, following the Court’s decision in Loper Bright Enterprises v. Raimondo, 603 U. S. 369 (2024). The Court tersely dismissed EPA’s citation to agency interpretative guidance, stating only that “we are not obligated to accept administrative guidance that conflicts with the statutory language it purports to implement.” The Court once again signaled that interpretations of federal law advanced by EPA and other federal agencies will be entitled to little if any deference, and that the outcome of challenges to regulatory agency actions will in many cases depend on judicial parsing of the meaning of ambiguous words and phrases embedded within complex statutory language.

The case is City and County of San Francisco v. EPA, No. 23-753.