SCOTUS reins in EPA authority over receiving water quality in landmark Clean Water Act case

On March 4, 2025, the U.S. Supreme Court issued a sharply divided 5 - 4 ruling in City and County of San Francisco v. Environmental Protection Agency, 604 U.S. ___, 145 S. Ct. 704, that places clear limits on how the Environmental Protection Agency may regulate water quality through its permitting authority under the Clean Water Act (CWA). The decision invalidates two provisions of San Francisco’s discharge permit that, in the Court’s view, improperly made the city responsible not for the content of its discharge, but for the overall quality of the water body receiving that discharge.

The Core Issue: Discharge vs. Receiving Water

San Francisco operates wastewater treatment systems that handle both sewage and stormwater. At issue in this case was a federal permit for the city’s Oceanside facility, which discharges treated effluent into the Pacific Ocean. In 2019, the EPA renewed the facility’s National Pollutant Discharge Elimination System (NPDES) permit, but added two contested provisions. One barred discharges that might “contribute to a violation” of water quality standards. The other prohibited creating “pollution, contamination, or nuisance” as defined by California law.

San Francisco objected to these terms, arguing that they went beyond what the CWA permits. While NPDES permits routinely contain “effluent limitations” that regulate the levels of pollutants in a discharge, these so-called “end-result” or “receiving water” provisions effectively conditioned compliance on the post-discharge condition of the receiving water itself, which the city argued it could not control.

Regulatory Framework and Legal Stakes

Under the Clean Water Act, discharges of pollutants into navigable waters are unlawful unless authorized by a permit. These permits typically include effluent limitations that restrict the amount, rate, and type of pollutants released. Section 301 of the CWA outlines the kinds of limits that can be imposed. Importantly, the statute also contains a “permit shield” provision (Section 402(k)), under which compliance with permit terms shields a discharger from liability for broader statutory violations.

This shield is critical for municipal and industrial dischargers. The penalties for noncompliance are severe, including steep civil fines and even criminal exposure. But if dischargers follow the rules set out in their permits, they are protected. San Francisco argued (and the Court agreed) that the EPA’s inclusion of receiving water limits undermined this structure by exposing permittees to enforcement based on factors outside their control.

The Court’s Reasoning

Writing for the majority, Justice Alito held that the EPA exceeded its authority by making permit compliance contingent on the environmental condition of the receiving waters. While the statute authorizes both “effluent limitations” and, under Section 301(b)(1)(C), “more stringent limitations” to meet water quality standards, the Court found that these must still be limitations on the discharge itself—not on water quality outcomes.

The majority acknowledged that the statute allows for narrative or best-practice-based conditions in some cases. However, it drew a firm line between regulating the discharge and regulating the effect that discharge has on the water body as a whole. The latter, the Court concluded, is inconsistent with the statute’s structure and history.

To underscore its point, the Court looked to the legislative history of the CWA. Prior to 1972, permittees could be held responsible for whether receiving waters met certain standards. Congress abandoned that approach when it passed the modern Clean Water Act, choosing instead to regulate at the point of discharge. That shift, the Court said, was intentional and must be respected.

The decision also addressed the practical problems with receiving water limits. In many cases (including San Francisco’s) discharges during storm events can exceed treatment capacity, leading to temporary water quality impacts. But such effects often result from circumstances beyond the permittee’s control, such as rainfall. Holding dischargers liable in those circumstances would, in the Court’s words, “eviscerate” the permit shield and create unmanageable compliance burdens.

Dissent and Broader Implications

Four justices dissented, arguing that the statute’s language authorizes any limits necessary to meet water quality standards, including ones focused on the condition of the receiving waters. But the majority found that this reading would resurrect the very approach Congress rejected in the early 1970s.

For permittees, this decision narrows the scope of lawful permit conditions and brings renewed attention to how water quality goals are framed. While numeric and narrative effluent limitations remain valid tools for regulating discharges, permit conditions that effectively require a permittee to ensure compliance with ambient water quality standards, regardless of the source or cumulative effect, can no longer stand.

Looking Ahead

This decision will likely reshape how NPDES permits are drafted and reviewed. It affirms that the EPA must clearly define what a permittee must do or not do, and cannot rely on after-the-fact measurements of water quality to determine compliance. It may also increase the burden on regulators to develop pollutant-specific limits or require better data from applicants before issuing a permit.

For municipalities and regulated industries, San Francisco v. EPA is a major win. It restores certainty to the permit shield doctrine and reinforces the statutory distinction between regulating discharges and regulating water bodies. But it also signals a shift in how the EPA must approach enforcement and water quality protection going forward favoring clearer, measurable limits over broader, outcome-based conditions.