UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WSG 12A
Date Signed: June 20, 1978
MEMORANDUM
SUBJECT: May a Community Public Water System Raise the Defense in an Enforcement
Proceeding that it is not a "Public Water System",
Under §1401(4) of the SOW A, Because it Does Not Provide Water for Human
Consumption?
FROM: Lorraine Chang, Attorney-7 (signed by L. Chang)
Water Quality Division (A-131)
TO: James Manwaring, Chief
Drinking Water Branch (WH-550)
If a water supplier can show that it does not fit the definition of a public water system, it may
raise that defense in an enforcement proceeding. The definition is not easy to evade, however, in view
of the broad coverage and purpose of the SDWA.
The SDWA was intended to establish NPDWRs which apply to as many water suppliers as
possible. The statutory language in §1411 is clear, "NPDWR shall apply to each public water system
in each state," unless it meets the four listed criteria. The legislative history states that such regulations
"are to apply to public water systems and are to protect public health to the maximum extent feasible."
House Report 93-1185 at 1. The issue remains whether, aside from listed exceptions, a water supplier
can avoid application of NPDWR on the ground that it is not "a system for the provision to the public of
piped water for human consumption", as defined in §1401(4).
The problem of community water systems attempting to evade the NPDWR is exemplified by
Saginaw-Midland, Michigan's attempt to define itself out of the Act by contract with its customers.
Two issues are raised; first, whether the water supplier, merely by saying it does not supply its water for
human consumption, although it actually is so used, can be excluded from the §1401 definition. The
second, is that even if the supplier is still considered a public water system, whether its customers can
contract away their right to safe drinking water under the Act. The answer to both of these is no.
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WSG 12A
The first issue involves statutory construction of the phrase "for human consumption". Is this
phrase to be applied to the intent of the water supplier, as shown by his declarations or is it
determinable by the actual use to which the water is put? There is clear authority to the effect that the
actual facts should control.
In ICC v. A.W. Stickle & Co.. 41 F. Supp. 268 (E.D. Okla., 1941) the court held that a
transporter of lumber who was paid for the transportation function could not avoid compliance with the
Motor Carrier Act merely by asserting that it was engaged only in the lumber wholesale business. The
language of the Court is equally applicable to the Saginaw-Midland situation;
"It must be assumed that Congress, in defining a private carrier, did not
attempt thereby to afford a means or device whereby one might evade
the provisions applicable to common or contract carriers .... It is the
effect of the plan, of what is actually being done, rather than the
designation of it by the person concerned ... that is to govern if the
beneficial results intended by the Act are to be attained." Id. at 273.
In S.E.C. v. American International Savings & Loan Ass'a. 199 F. Supp. 341 (D.C. Md.,
1961) an institution which called itself a savings and loan, but which performed none of the functions of
such an organization, was held not to be entitled to an exemption from the Securities Act of 1933 as a
savings and loan. The court, relying on earlier authority, held that an entity's designation of itself would
not be upheld if it was a "gross misuse of the name." Id. at 350.
Furthermore, it has been held that "there is a presumption against a construction which would
render a statute ineffective or inefficient or which would cause grave public injury or even
inconvenience." U.S. v. Powers. 59 S.Ct. 805 (1939). An interpretation of the SDWA which would
allow water suppliers to actually supply consumers with unclean water could very easily cause a "grave
public injury."
The second issue is whether the public beneficiaries of the Safe Drinking Water Act can waive
their right to be protected by it, by the formation of a contract with a water supplier allowing it to
provide untreated water. Under principles of contract law, applied to the purpose of the act, they
cannot.
The general rule is that if a performance rendered in a bargaining transaction is unlawful and
forbidden, the parties cannot make it lawful by declaring that as between themselves it shall be so
regarded. Corbin on Contracts at 727. On the other hand, waiver may be allowed if the public at
large will suffer no harm thereby. Id. at 732.
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The general rule was applied in Brooklyn S. Bank v. O'Neil. 65 S.Ct. 895 (1945), in which
employees were not allowed to waive the right to recover liquidated damaged under the Fair Labor
Standards Act. The Court stated the rule that a statutory right conferred on a private party, but
affecting the public interest, may not be waived or released if such waiver or release contravenes the
statutory policy. Id at 900-901. In the absence of specific statutory language on the question, the
Court looked to broad considerations of legislative policy, as evidenced in the legislative history and
provisions and structure of the Act. Of primary importance as the fact that the purpose of the statute
was to protect the national health and well being, by protecting certain groups in the population. Id. at
902. Other negative considerations were that such waivers would nullify the deterrent effects of the Act
and detract from its enforcement effectiveness. Id. at 903. Also important was the fact that the
statutory provision in question was mandatory in form. Id. at 904.
Many of the same considerations also apply to the Safe Drinking Water Act. It is
unquestionable that its purpose is to protect the public health and welfare. This purpose, not being tied
to purely private rights, makes its effect even stronger than with the Fair Labor Standards Act. Also,
deterrence would be affected if water systems had a method for evading the law with such possibilities
of misuse. Water suppliers by attractive rates might effectively "bribe" their customers to accept lower
water quality, if it were allowed. Enforcement would be hampered, for citizen suits are a part of the
Act and those who had waived their rights would thus be precluded from participating in an important
mechanism for insuring high water quality. Finally, the language in the Safe Drinking Water Act is also
mandatory. Section 1411 states that national primary drinking water regulations shall apply to each
public water system in each state unless it meets defined and non-discretionary criteria.
The SDWA intended to apply to all water suppliers who are public water systems, in fact.
Neither a change in designation by the supplier nor consent to evasion by the consumer can narrow the
coverage of the Act. A claim by a water supplier that it is not a public water system, raised as a
defense in an enforcement action, must be supported by concrete evidence; a claim based entirely on
self-designations would not be conclusive.
I/ Nancy Warren, a law clerk with OGC's Water Division, assisted substantially in the
preparation of this opinion.
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