The Clean Water Rule, issued by the U.S. Environmental Protection Agency (“EPA”) and U.S. Army Corps of Engineers (“Corps”) in June 2015, 80 Fed. Reg. 37,054 (June 29, 2015) (“Rule”), is one of the most significant and controversial regulatory developments of 2015, as demonstrated by the currently pending legal challenges instituted by more than 35 different parties, including at least 28 states. There are also at least two lines of legislative attack, including proposed bills both to de-fund the Rule’s implementation, as well as to repeal it.
The Rule is intended to clarify regulatory confusion over which aquatic features, including dry washes, streams and wetlands, constitute "waters of the United States," and are therefore subject to Clean Water Act protection. The Rule is significant and controversial primarily because, while the Rule makes a handful of aquatic features clearly non-jurisdictional, on balance, the Rule significantly expands jurisdiction by:
- Eliminating former provisions requiring a showing that entire categories of features are, have been, or could be navigable before considering them jurisdictional;
- Increasing the number and types of features that are jurisdictional “per se”; and
- Increasing the types of features that are potentially jurisdictional, subject to case-specific technical “significant nexus” analysis.
In short, the Rule more broadly defines jurisdiction, thereby effectively increasing regulation for a broad spectrum of activities. The status of legal and legislative challenges to the Rule is summarized below.
Legal Challenges to the Rule
The U.S. Court of Appeals for the Sixth Circuit is poised to rule on a motion to dismiss for lack of subject matter jurisdiction in a suit brought by 18 states challenging the validity of the Rule. The case was transferred to the Sixth Circuit at the request of respondents EPA and the Corps, who assert that the Rule falls within a narrow class of specific EPA actions listed in 33 U.S.C. § 1369(b)(1) that are reviewable only by circuit courts. The 18 state petitioners that brought the motion to dismiss disagree, arguing the case should be litigated in district court under the Administrative Procedure Act. According to the state petitioners, reviewability under section 1369 has the potential to insulate the Rule from future challenges in enforcement proceedings like those at issue in landmark cases such as Rapanos v. United States, 547 U.S. 715 (2000) and Sackett v. EPA, 132 S.Ct. 1367 (2012).
In their papers, EPA and the Corps assert that, pursuant to 33 U.S.C. § 1369(b)(1)(E) and (F), the Rule is "an effluent limitation or other limitation under [33 U.S.C. §§ 1311, 1312, 1316, or 1345]," or alternatively, involves the issuance or denial of a permit, and therefore original jurisdiction belongs in the court of appeals. The state petitioners assert that the Rule does not impose any "effluent limitation" or "other limitation," or constitute an “issuance of a permit,” within the statutory definitions. Three district courts have issued decisions on this issue; a North Dakota district court rejected EPA and the Corps’ arguments, North Dakota v. EPA, 2015 WL 5060744, at *1-3 (D. N.D. Aug. 27, 2015), whereas a Georgia court, Georgia v. McCarthy, 2015 WL 5092568, at *2-3 (S.D. Ga. Aug. 27, 2015), and a West Virginia court, Murray Energy Corp. v. EPA, 2015 WL 5062506, *3-6 (N.D. W.Va. Aug. 26, 2015), accepted them. On balance, practitioners with Clean Water Act expertise tend to agree with the North Dakota court, who found that the Rule does not impose any "effluent limitation" or "other limitation" within the statutory definition. Rather, the Rule "redefines what constitutes ‘waters of the United States.'"
A judicial finding that the Rule is an “effluent limitation” or “other limitation” would have important implications for the equally controversial Clean Water Act issue regarding judicial review of jurisdictional delineations performed pursuant to the Rule. If the Rule is ultimately upheld, it will govern jurisdictional delineations, which are technical studies and reports that involve the application of the Rule to particular projects to determine if features in those properties are subject to Clean Water Act protections. Currently there is a split among the circuits, with the U.S. Court of Appeals for the Fifth Circuit1 holding that jurisdictional delineations are not final agency actions subject to judicial review, and the U.S. Court of Appeals for the Eighth Circuit2 holding the opposite. EPA and the Corps have argued that the Supreme Court should resolve this split as determined by the Fifth Circuit, finding that jurisdictional delineations are not final actions subject to judicial review.
However, arguably, if the Rule is an “effluent limitation” or “other limitation,” as argued by EPA and the Corps in challenges to the Rule, then the application of that effluent limitation to particular properties and activities would be an adjudicatory determination that should, in fact, be subject to judicial review, which is contrary to the position argued by EPA and the Corps in the lawsuits relating to judicial review of jurisdictional delineations. Notably, on December 11, 2015, the U.S. Supreme Court granted certiorari to resolve the circuit split over this issue3.
The Sixth Circuit heard oral argument on the motion to dismiss on December 8, 2015. The hearing on the motion follows the court’s October 9, 2015 decision to stay the Rule nationwide, after finding that the state petitioners were likely to succeed on the merits. The North Dakota district court had stayed the Rule in 13 states, which had caused uncertainty from a regulatory standpoint. Now the Rule is stayed across the nation, pending further action by the Sixth Circuit, or some other legislative action.
As respects the merits, the North Dakota court was the first to address substantive legal challenges to the Rule. Specifically, the North Dakota court held that the Rule failed to satisfy the standards set forth by the U.S. Supreme Court in Rapanos v. United States, 547 U.S. 715 (2006). The court explained that the Rule allows EPA and the Corps to regulate "waters that do not bear any effect on the ‘chemical, physical, and biological integrity' of any navigable-in-fact water." Specifically, the court found that the definition of "tributary" includes "vast numbers of waters that are unlikely to have a nexus to navigable waters within any reasonable understanding of the term." The court also found that the agencies likely promulgated the Rule in violation of the Administrative Procedure Act. When determining that the state petitioners were likely to succeed on the merits, and thus granting a nationwide stay, the Sixth Circuit reached a similar conclusion.
Legislative Challenges to the Rule
Lawmakers have also challenged the rule through a dual-track approach, attempting to attack the rule substantively and through defunding. Sen. Joni Ernst (R-Iowa) authored a resolution (S.J. Res. 22) that would block the rule under the 1996 Congressional Review Act. As of November 16, 2015, the resolution passed the Senate and was sent to the House of Representatives, but is being “held at the desk,” which means it is awaiting a decision to refer it to committee, to place it on the calendar, or to bring it directly to the floor for consideration by unanimous consent. But President Obama is expected to veto the resolution, and opponents of the Rule may not have the needed votes to override him. Republican leaders also attempted to include a policy rider prohibiting funding for the Rule in the appropriations bill negotiated in early December. However, on December 16, 2015, Congress passed an appropriations bill that leaves the Clean Water Rule unscathed. The Federal Water Quality Protection Act (S. 1140), a measure from Sen. John Barrasso (R-Wyo.), which would have repealed the Rule and also set new criteria for any future rule pertaining to streams and wetlands that fall under the scope of the Clean Water Act, was blocked by Senate Democrats in early November.
While the primary purpose of the Rule is to clarify jurisdiction, the proper scope of Clean Water Act jurisdiction and resulting limits of regulation have been debated for years. It will likely take many more years before the litigation and legislative challenges to the Rule finally settle the scope of Clean Water Act regulation. The concurrent judicial and legislative challenges to the Rule, and the continued debate of longstanding issues regarding the scope of Clean Water Act regulation make for interesting law, but introduce a good deal of uncertainty for the regulated community—which is what the Rule was first and foremost supposed to eliminate.