The breadth of the meaning of "waters of the United States" under the federal Clean Water Act (CWA) has bedeviled courts, environmental activists, and energy and other project developers for decades. Unfortunately, a recent decision by the US Supreme Court is going to continue that uncertainty for at least several more years. This is significant because even something as mundane as cutting down a tree on what appears to be land can instead be deemed to be an action taking place in waters of the United States, and thus bring a project within the jurisdiction of the CWA.
On January 22, 2018, the Supreme Court issued a unanimous ruling in National Association of Manufacturers v. Department of Defense that will significantly impact the manner in which the Obama Administration's Clean Water Rule is analyzed by the judiciary and regulators. The Rule modifies the scope of the CWA, thereby affecting the ability of companies in the energy industry and elsewhere to discharge dredged or fill material into even the smallest bodies of water. The Supreme Court ruling dealt with a jurisdictional question of whether challenges to the Clean Water Rule must be brought in the federal district courts (the typical court of first impression for challenges to US EPA action) or in the federal circuit courts (as required for certain challenges related to the Clean Water Act). Several groups had sought interpretation of the Rule in the circuit courts to reduce the possibility of conflicting interpretations across the 94 federal judicial districts.
However, writing for the unanimous Court, Justice Sonia Sotomayor held that the limited situations in which the CWA required suits be brought in the circuit courts did not apply to the Rule, thereby requiring review of the Rule to begin in the federal district courts. This will have the imminent effect of negating the Sixth Circuit's nationwide stay of the Rule, potentially allowing for the Rule to go into effect immediately.
Given the disparate interpretations of the Rule by various district courts, this is likely to result in both a more fractured application of the Rule across the 94 federal judicial districts and a further delay before the CWA's scope is clarified on a nationwide scale. This in turn will make it more difficult for the regulated community to understand which development activities may be subject to the time consuming Clean Water Act permitting process.
Since the passage of the Clean Water Act in 1972, individuals, companies and municipalities have struggled with its guidelines, restrictions and scope. One of the most important ‐ but uncertain ‐ issues involved deals with the reach of the CWA itself. The CWA prohibits the unpermitted discharge of pollutants into "navigable waters," which are defined as "waters of the United States." 33 U.S.C. §§ 1311(a), 1362 (12). "Pollutant" is very broadly defined under the CWA, and includes any type of waste discharged into water, including not just obvious wastes but things like soil, sand, rock, heat or agricultural wastes (eg, vegetation). Because of the broad definition of pollutants, the definition of the phrase "waters of the United States" is of great importance, as it dictates the geographic reach of the federal government's already broad regulatory authority under the CWA.
Numerous cases have addressed which waters are "waters of the United States" and therefore covered by the CWA. The CWA's applicability to wetlands and related non-navigable waters was considered in a trio of Supreme Court cases: in 1985 in United States v. Riverside Bayview Homes, in 2001 in Solid Waste Agency of N. Cook Cnty. v. United States Army Corps of Eng'rs, and in 2006 in Rapanos v. United States. These cases did little to clarify the reach of the CWA, as Rapanos was a 4-1-4 split decision, where Justice Kennedy's solo opinion considered whether there was a "significant nexus" between the wetlands at issue and traditional navigable waters. After these holdings, numerous groups sought further rulemaking or clarification from the EPA concerning the scope of the CWA.
Under President Barack Obama in June 2015, the EPA and the Army Corps of Engineers promulgated the Clean Water Rule, also known as the WOTUS Rule, in an effort to clarify the meaning of "waters of the United States" and expand the protections afforded by the CWA. The Rule created six categories of water that were jurisdictional by rule and two categories that were jurisdictional on a case-by-case basis upon consideration of the existence of a significant nexus to other jurisdictional waters.
Many legal challenges quickly followed, brought by 31 states and 52 non-state entities, primarily arguing that the Rule violated the 10th Amendment's federalism principles and the Constitution's commerce clause. These challenges were filed in both federal district and circuit courts, and the federal circuit court challenges were consolidated in the Sixth Circuit.
On October 9, 2015, the Sixth Circuit granted a nationwide stay of the Rule, holding that the challengers had demonstrated a substantial possibility of success on their claims. A jurisdictional question then became a central focus of the challenges when the National Association of Manufacturers intervened and moved to dismiss for lack of jurisdiction, arguing that the federal district courts were the proper venue for challenges to the Rule. The federal government opposed this motion, arguing that the challenges were properly before the circuit courts of appeals.
On February 22, 2016, the Sixth Circuit ruled in favor of the government, determining that the circuit courts had jurisdiction pursuant to the statutory language of the CWA. That ruling was appealed to the Supreme Court.
In the unanimous decision issued on January 22, the Supreme Court reversed the Sixth Circuit and remanded the case with instructions to dismiss the petitions for review of the rule due to a lack of jurisdiction. This creates the potential for enforceability of the Rule, but the numerous challenges to the Rule in federal district courts will now proceed.
While the Sixth Circuit is likely to act on the Supreme Court's order soon, until it does, its stay remains in effect. Even if its stay were lifted, a district court could issue a nationwide stay, and regional stays could go into effect, such as one issued by the North Dakota federal district court before the Sixth Circuit’s stay, which is applicable to 13 states. North Dakota v. EPA, 127 F. Supp. 3d 1047 (D.N.D. 2015). This creates substantial uncertainty and the likelihood of a much longer period of time before the meaning of "waters of the United States" is definitively decided by the Supreme Court.
Uncertainty is also present due to the actions of the executive branch. On February 28, 2017, President Donald Trump issued Executive Order No. 13778, which directed the EPA and the Army Corps of Engineers to propose a rule rescinding or revising President Obama's Clean Water Rule. The agencies issued two proposed rules in the following months. The first proposed rule, issued on July 27, 2017, would rescind the Rule and reinstate the pre-2015 definition of "waters of the United States." This would potentially provide additional clarity to the definition, before a substantive re-evaluation of the definition could then be undertaken. The second proposed rule, issued on November 16, 2017, would delay the Clean Water Rule's effective date for two years after it is finalized and published in the Federal Register. This would provide a period during which the Trump administration's EPA would have time to either rescind the Rule or promulgate a new definition, while preventing the Rule from taking effect. The period for public comment on these rules has ended, but neither rule has been finalized.
In light of these judicial, regulatory and executive uncertainties, predicting the precise reach of the CWA in the coming years will remain challenging. The Supreme Court's recent jurisdictional ruling did not address the substantive question of the CWA's scope, but instead made it likely that it will take longer for any centralized definition to be reached. However, the Rule's longevity is by no means guaranteed, as the EPA's proposed rulemaking suggests that the CWA's reach may change soon, although what its precise contours will be is murky at best.
This immediate uncertainty means that the analysis of the application of the CWA to any particular project will require an even more intense evaluation of relevant facts and local jurisprudential and regulatory authority. It will be critical for developers that expect to discharge materials into even the smallest bodies of water to make sure that they understand the status of the Rule's enforcement in states and regions where they operate, or risk running afoul of the CWA's permitting and other compliance requirements.