Activists, Trump admin face off at Supreme Court over wastewater case

By Daniel Uria

Nov. 6 (UPI) -- The U.S. Supreme Court will hear its first environmental case of the new term on Wednesday, a consequential fight that has drawn attention from environmental activists, fossil fuel proponents and the Trump administration.

The case is one of two presenting arguments before the high court Wednesday -- the other a New York dispute that seeks to determine the responsibility for stock-linked retirement plans that sank in the wake of market losses for computer giant IBM.


County of Maui, Hawaii vs. Hawaii Wildlife Fund

The high court will hear arguments about whether sewage flowing into the Pacific Ocean off Maui's coast violates the federal Clean Water Act.

The case began with a lawsuit from four environmental groups in 2012, which argued treated wastewater seeping into the ocean was killing coral reefs. The discharge, they argue, is a violation of the landmark 1972 federal law, which governs water pollution and sets regulations for wastewater treatment. The law is considered one of the United States' first major environmental reforms.


Under the law, polluters are required to obtain federal permits for wastewater that enters navigable waters, such as the Pacific Ocean. It centers on the Lahaina Wastewater Reclamation Facility, a decades-old Maui treatment plant that processes millions of gallons of waste per day to be deposited into underground wells.

A 2013 EPA study showed, however, that 90 percent of the wastewater leached through groundwater and ended up in the Pacific.

The activist groups argue the plant failed to obtain a permit from the Environmental Protection Agency.

The county of Maui argues it's not liable for environmental damage because the Clean Air Act doesn't explicitly state regulations for pollution via groundwater. It argues the law mandates such permits only for direct discharge into navigable waters, such as a pipeline.

A lower court ruled in favor of the environmentalists, saying pollution was "fairly traceable" to the plant.

"The discharge was the functional equivalent of a discharge into the navigable water," it wrote.

Justices on the high court bench Wednesday will look to determine whether the federal law "requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, such as groundwater."

Maui is concerned an unfavorable ruling could make scores of other pollutant sources liable under the Clean Water Act. The plaintiffs fear a defeat would create a loophole for waste companies to bypass federal law and dispose unlimited pollutants through an indirect means of discharge.


The case has attracted dozens of amicus briefs from additional environmental groups, the Trump administration and fossil fuel proponents. The U.S. Justice Department is siding with Maui in the case, in line with the administration's support for loosening business-related regulations.

Retirement Plans Committee of IBM vs. Jander

Justices Wednesday will decide whether to apply a high court precedent to settle a dispute over the duty of prudence of a fiduciary under the Employee Retirement Income Security Act of 1974.

IBM employees filed the class-action lawsuit led by Larry Jander in 2015 after IBM stock, which was included in employees' 401(k) retirement plan fell by 7 percent.

The suit argues the company's Retirement Plan Committee caused 401(k) participants to lose out on retirement savings when IBM's stock price fell. It says the executive-led group continued to invest retirement funds in the IBM stock despite knowing the company's reported value was artificially inflated.

It says executives violated their duty of prudence by failing to make corrective disclosures or freeze further investment in the stock, even though they knew of non-public information that the business was struggling.

A lower court ruled in favor of the plaintiffs, agreeing that disclosure of insider information about fraud should have been the prudent response because it would've resulted in less financial harm to the retirement fund.


IBM argues the lower ruling violates a 2014 Supreme Court decision that states a complaint must show the company failed to take a legal, alternative action -- and that a prudent fiduciary in the same circumstances wouldn't have thought that stopping purchases or publicly disclosing negative information would cause more harm than good.

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