Following a series of Supreme Court cases grappling with the extent of the jurisdiction under the Clean Water Act (CWA), the U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Corps) jointly released a proposed rule amending the definition of “waters of the United States.” See 79 Fed. Reg. 22188 (Proposed Rule), available at 07142.pdf. Touted by EPA and the Corps as an effort “to clarify” the CWA, the proposed definition would apply to all CWA programs. Following numerous public requests and commentary regarding the complexity of the Proposed Rule, on June 10, 2014 EPA and Corps announced an over 90 day extension of the comment period, which now closes on October 20, 2014. This Client Alert provides an overview of the definition and its potential impacts, as well as the recent federal case law leading to this action.

The CWA authorizes EPA and the Corps to pursue enforcement for illegal discharges of a pollutant into “navigable waters.” “Navigable waters” is further defined in the CWA as “waters of the United States.” In identical regulations, EPA and the Corps have more specifically described “waters of the United States” to include several distinct categories. Among these categories are “waters, including wetlands, adjacent to” waters. Efforts to clarify, limit, or expand the reach of the CWA have frequently centered on litigation over this language. The most recent major Supreme Court cases, Solid Waste Agency of Northern Cook County (SWANCC) v. Corps of Engineers (2001) and Rapanos v. United States (2006), have resulted in a split in the lower courts’ application of the CWA, with some courts applying a two-part test established by the Rapanos majority and others using a “significant nexus” analysis described in a concurrence. The Proposed Rule attempts to address areas left open by these cases and provide greater clarity for those trying to operate in compliance with the law.

Although EPA and the Corps released guidance on CWA jurisdiction in 2008 and published draft guidance again in 2011, until the issuance of this Proposed Rule, the regulatory definitions at the heart of the split in court and agency interpretations have remained unchanged. In a press release for the Proposed Rule, EPA stated that it believes that businesses will benefit “by increasing efficiency in determining coverage” of the CWA, and that the Proposed Rule establishes standards “based on the science.” In an attempt to further understand “the nature of connectivity and effects of streams and wetland on downstream waters,” EPA’s Office of Research and Development prepared a draft report, published in 2013, analyzing published scientific literature. That report serves as the basis of much of the Proposed Rule, but is not yet final. The report is currently undergoing peer review by EPA’s Science Advisory Board (the SAB).

Parties interested in commenting on the Proposed Rule initially were given until July 21, 2014. Numerous organizations, however, sought extensions for comments. For example, The National Association of State Foresters and the National Association of State Departments of Agriculture jointly requested an extension, stating that the rule will “significantly impact state regulatory programs and other state agency programs and responsibilities,” and noting that the “Connectivity Study, which the agencies have relied upon in the development of this proposal, remains to be finalized” by the SAB. Likewise, a group of over 40 organizations representing “a large cross-section of the nation’s construction, real estate, mining, agriculture, manufacturing, energy, and wildlife conservation sectors,” requested an extension under the name the Waters Advocacy Coalition (WAC). The WAC noted the SAB’s continuing review of the connectivity study, the purported lack of economic analysis, and “the scope and complexity of the proposed rule and its supporting documents.”

Following outcry from these and other organizations and entities, the EPA and the Corps extended the comment period through October 20, 2014.

Key provisions of the Proposed Rule include new and expanded definitions essential to determining whether a water is a “water of the United States” such as:

  • Tributaries. The Proposed Rule broadens the definition of “tributary” to include waters, whether natural or manmade, that contribute directly or indirectly, to the flow of waters used in interstate commerce, interstate waters, territorial seas, or impoundments of the same. Further, in the Proposed Rule all waters meeting the definition of “tributary” are to be considered “waters of the United States.”
  • Adjacent waters. The draft regulatory language substitutes for “adjacent wetlands” the term “adjacent waters,” i.e., waters that are adjacent to waters used in interstate commerce, interstate waters, or territorial seas. The definition includes waters that are “neighboring,” as well as immediately adjacent. “Neighboring” is defined to include waters that have a “significant nexus” to those traditional navigable waters.
  • Other waters. “Other waters” are “not jurisdictional as a single category,” instead they are determined to be jurisdictional on a case-by-case analysis by assessing whether they have a significant nexus to waters used in interstate commerce, interstate waters, or territorial seas. This determination is made based upon assessment of the “other waters” either individually or as a group of similarly situated waters within a region.
  • Significant nexus. The Proposed Rule defines a “significant nexus” to be a connection between waters or wetlands, either alone or in combination with similarly situated waters in the region, such that the water or wetland “significantly affects the chemical, physical, or biological integrity” of waters used in interstate commerce, interstate waters, or territorial seas. This aspect of the Proposed Rule has been the subject of much of the surrounding controversy, as it is thought to result in a much more expansive concept of what will become a jurisdictional water.

Other aspects of the CWA regulations will remain the same. In particular, as proposed, the Proposed Rule will not alter the following:

  • Existing permitting exemptions and exclusions to CWA applicability remain unchanged. Exclusion of waste treatment systems, prior converted cropland, and water transfers remain, as do permitting exemptions for farming, silviculture, ranching, and “other specified activities.”
  • Certain longstanding categories of “waters of the United States” will likewise stay the same and include:
    • Waters that are currently, were previously, or may be susceptible to use in interstate commerce.
    • All interstate waters.
    • Territorial Seas.
    • Impoundments of the above.
  • The definitions of “adjacent” and “wetlands” are the same as before.

Objections have been raised regarding the language of the Proposed Rule, with Republican lawmakers questioning at a hearing of the House Committee on Transportation and Infrastructure on June 11th whether its alleged ambiguity will result in lawsuits. Chairman Kevin Kelly of The National Association of Home Builders likewise raised challenges to the rule, arguing before the House Committee that it will “unnecessarily impose additional regulations that would make it more difficult for our industry to provide homes at an affordable price point.” The American Farm Bureau Federation started a “Ditch the Rule” campaign almost immediately following the Proposed Rule’s publication, asserting that “the rule would expand federal control over land features such as ditches and areas of agricultural land that are wet only during storms.” By contrast, environmental groups have praised the rule, such as Sierra Club Executive Director Michael Brune who called it an “effort to restore a common-sense approach to protecting our nation's lakes, rivers and streams.”

Additional Case Law Background

SWANCC dealt with the so-called “migratory bird rule,” a Corps administrative interpretation that asserted jurisdiction over isolated waters or wetlands, provided that they were used as a habitat by migratory birds that cross state lines. According to the Corps, the migratory bird rule was a valid extension of federal jurisdiction, which extends to waters “the use, degradation, or destruction of which could affect interstate commerce.” Following a circuit split, the United States Supreme Court rejected the migratory bird rule in SWANCC. In the opinion, the majority found that there was no “clear indication that Congress intended” to extend the authority of the Corps that far. Further, the Court held that asserting federal jurisdiction over isolated waters “would result in a significant impingement of the States’ traditional and primary power over land and water use.”

Nonetheless, the holding in SWANCC was confined to an assessment of the migratory bird rule and did not speak directly to the overall ability of the Corps and EPA to exert jurisdiction over all non-traditionally navigable waters. This left some confusion regarding the reach of federal authority. The Proposed Rule establishes a standard by which “other” wetlands or waters that have a “significant nexus” with more traditional waters may fall under CWA jurisdiction.

The next major case, Rapanos, likewise addressed federal jurisdiction over wetlands. In a plurality opinion, the Supreme Court evaluated whether CWA jurisdiction included wetlands that do not contain nor are adjacent to navigable waterways. Concluding that “waters of the United States” includes “only relatively permanent, standing or flowing bodies of water,” the plurality specifically excluded “transitory puddles or ephemeral flows of water” from the definition of “waters of the United States.” Further, the Court held that only a wetland that has a continuous surface connection to an adjacent navigable water falls under the CWA.

While the plurality in Rapanos expressed this two-part test, Justice Kennedy’s concurrence—taking a phrase used in SWANCC—instead suggested that those wetlands with a “significant nexus” to navigable waters would fall within federal jurisdiction. This broader approach examines whether the wetland at issue, “either alone in or in combination with similarly situated lands . . . significantly affects” the integrity of navigable waters.

Since Rapanos, courts have again split in their interpretation of “waters of the United States.” While some have applied the two-part test espoused in the plurality opinion, others have used the “significant nexus” standard from Justice Kennedy’s concurrence. The Proposed Rule cites repeatedly to the scientific factors that form the basis of the “significant nexus” analysis, which also is a key focus of the EPA’s Office of Research and Development’s draft report. In addition, by defining “significant nexus” and providing the context for when the significant nexus analysis should be used, the Proposed Rule seeks to afford greater clarity in application.