On Friday, October 9, 2015, the United States Court of Appeals for the Sixth Circuit issued an Order halting the implementation of the final "Clean Water Rule" published by the U.S. Army Corps of Engineers (the "Corps") and the U.S. Environmental Protection Agency ("EPA") in June of 2015. (80 Fed. Reg. 37,054 (June 29, 2015)) As detailed in a prior MGKF Client Alert, the Clean Water Rule was expected to have a profound effect on land development across the nation through its redefinition of the geographic scope of the phrase "waters of the United States" ("WOTUS"), which forms the jurisdictional limits of the Corps' permitting authority under Section 404 of the Clean Water Act.
The Sixth Circuit Stay Order is the latest legal development in the administrative challenges to the controversial Clean Water Rule. Lawsuits challenging the validity of the rule have been filed in various courts by numerous states, generally contending that the redefinition of WOTUS is inconsistent with the Clean Water Act and would result in an illegal expansion of the Corps' and EPA's regulatory jurisdiction. Most recently, the District Court for the District of North Dakota granted a motion on August 27, 2015 for a preliminary injunction of the Clean Water Rule filed by 13 states, agreeing the challenging states' argument that there were apparent substantive and procedural deficiencies with the rule. While the District Court's ruling indicated that it enjoined the implementation of the rule, EPA responded almost immediately by stating that it would nonetheless continue to implement and enforce the rule in every state that had not been involved in the North Dakota District Court case, thereby creating a potential patchwork of regulatory coverage for the rule and further increasing the confusion surrounding the implementation and enforcement of the new WOTUS definition.
The newly-issued Sixth Circuit Order, delivered by Circuit Judge Keith McKeague, looks to "temporarily silence the whirlwind of confusion" around the Clean Water Rule, by staying the effectiveness of the rule "nationwide" pending further order of the court, thereby allowing the legal challenges to conclude before the rule can be implemented by the regulators.
In staying the effectiveness of the rule, the Sixth Circuit notably echoed the North Dakota District Court's criticisms of both the substantive and administrative underpinnings of the rule. Substantively, the Circuit Court questioned whether the WOTUS definition in the final rule was consistent with the Supreme Court's interpretation of the jurisdictional limits of the Clean Water Act in rulings such as Rapanos v. U.S., 547 U.S. 715 (2006). Administratively, the Court questioned whether the rulemaking by the federal agencies complied with the Administrative Procedures Act and provided the public with adequate notice of the potential framework for the final rule. Based on these concerns, the Court concluded that "petitioners have demonstrated a substantial possibility of success on the merits of their claims."
While the Sixth Circuit Order will certainly not be the final chapter in the Clean Water Rule saga, the consistent critique of the rule now provided by two separate courts does not bode well for the future of the rule, and increases the likelihood that the rule will end up either before the Supreme Court for further review or back with the Corps and EPA for reconsideration.