In the Final Rule, EPA interpreted the Clean Water Act to not require the NPDES permitting for pesticide application in certain circumstances. The rule stated a permit was not required for application of pesticides directly into, over, or near waters of U.S. (e.g., application to forest canopy), provided the application is in compliance with relevant FIFRA requirements. In these circumstances, EPA found that the pesticide application is not a discharge of "pollutant" as defined under the CWA because the pesticide is a useful product, not a "waste" when it is released from the application equipment. The CWA definition of "pollutant" includes "chemical waste" and "biological material," but does not include any other terms that might apply to pesticides.

The Court agreed with EPA’s interpretation that not all pesticides are "pollutants" and that chemical pesticides become "chemical waste" and therefore "pollutant" only after they are "excess" or "residual" pesticides in the environment. Nevertheless, the Court held that the plain language of the statute contradicts EPA’s other conclusions. Specifically, the Court found that, under the plain language of the statute, (1) all biological pesticides are "biological material" and therefore "pollutant"; and (2) excess or residual chemical is discharged "from a point source" (the application equipment) even though it becomes "excess" or "residue" at some time after being released from the application equipment.

Based on this reasoning, the Court held that if some pesticide enters waters of the U.S. as a result of pesticide application, the application is a discharge of a "pollutant." An exception is made only for applications of aquatic chemical pesticide that "leaves no excess portions after performing its intended purpose."

Although EPA’s rule focused on the application of pesticides into, over, or near waters, the Panel extended its analysis to terrestrial applications. According to the Court, pesticide application is a discharge of a "pollutant" "from a point source" whenever pesticide enters waters and would not have entered waters "but for" the original application. In the Court’s words, "It is clear that but for the application of the pesticide, the pesticide residue and excess pesticide would not be added to the waters, therefore, the pesticide residue and excess pesticide are from a 'point source.’ …Given all of the above, … dischargers of pesticide pollutants are subject to the NPDES permitting program in the Clean Water Act." This applies to pesticides applied to crops, as well as all other use patterns where some excess or residue ultimately enters water. Affected applications include herbicides used for vegetation management along federal, state, county, and municipal roads; rights-of-ways for railroads, electric transmission corridors; and spraying for mosquito control by municipal or county personnel. In addition, the Court’s broad interpretation of "pollutant" to include any chemical product that ultimately becomes "waste" in the environment would apply to a broad range of activities and substances, from deicing treatments along roadways to fertilizer on lawns.