On January 13, 2017, the US Supreme Court granted certiorari for an appeal that will allow the Court to determine the proper jurisdiction for litigation challenging the Clean Water Rule (the Final Rule).[1] The federal Clean Water Act (CWA) provides for original jurisdiction in the Circuit Courts of Appeal for certain categories of actions taken by the US Environmental Protection Agency (EPA). By accepting review of the appeal, the Court will now decide whether to affirm the Sixth Circuit Court of Appeal’s assertion of original jurisdiction over litigation challenging the Final Rule, and in doing so, the Court will set the stage for consideration of Final Rule litigation on the merits. As a result of the Supreme Court’s grant of certiorari, on January 25, 2017, the Sixth Circuit Court of Appeal granted a motion to hold in abeyance the litigation over the Final Rule until the US Supreme Court reaches a decision regarding jurisdiction.

Clean Water Rule’s Broad Application

EPA and the US Army Corps of Engineers (Corps) jointly issued the Final Rule to define “waters of the United States” (WOTUS), a threshold term that delimits CWA’s scope and application. The Final Rule has broad application. It defines jurisdictional waters not only for Section 404 of the CWA (permitting for dredge and fill operations) but also under Section 303 (addressing water quality standards and maximum daily loads); Section 311 (relating to oil spill prevention and response); Section 401 (concerning state water quality certifications); and Section 402 (establishing the National Pollutant Discharge Elimination System (NPDES) permit program). Critics of the Final Rule argue that it expands federal jurisdiction significantly beyond the bounds of court precedent interpreting the CWA’s statutory mandate. We previously published a Client Alert that discusses the Final Rule’s scope and implications in greater detail.

The Agencies’ Jurisdictional Victory in the Sixth Circuit and the Grant of Certiorari

Shortly before the Final Rule was scheduled to take effect on August 28, 2015, challenges to the Final Rule were filed in district courts and circuit courts across the country, including a challenge by 13 states in the US District Court for the District of North Dakota[2], and many were transferred to and consolidated before various US Court of Appeals. The US Judicial Panel on Multidistrict Litigation consolidated the petitions before the circuit courts for review and selected the US Court of Appeals for the Sixth Circuit to hear the consolidated petitions. On October 9, 2015, the Sixth Circuit stayed the implementation of the Final Rule nationwide. Many petitioners then moved for a voluntary dismissal of their case, arguing that the Sixth Circuit lacked jurisdiction. On February 22, 2016, in a 2-1 decision, the Sixth Circuit determined that it has jurisdiction over the numerous legal challenges to the Final Rule, thus siding with the position of the EPA and the Corps.[3]

Judge David W. McKeague delivered the Sixth Circuit’s opinion, holding that the federal circuit courts have original jurisdiction over challenges to the Final Rule under the CWA, which identifies the seven types of actions by the EPA Administrator that are reviewable directly in the federal circuit courts. Specifically, the CWA provides for direct review of certain EPA actions “in approving or promulgating any effluent limitation or other limitation” or “in issuing or denying any permit under section 1342,” which governs the issuance of permits for the discharge of pollutants.[4]

EPA and the Corps considered the Sixth Circuit’s ruling a significant victory in a complex multipart legal battle for many reasons, including because from an efficiency standpoint, consolidation in the circuit court avoids litigating the Final Rule in numerous district courts at once and simplifies the review process. One week after the Sixth Circuit’s ruling, intervenors led by certain industry coalitions filed a petition for rehearing en banc with the Sixth Circuit, which the court ultimately denied on April 21, 2016. Subsequently, a coalition of industry groups filed a petition for writ of certiorari with the US Supreme Court seeking review of the Sixth Circuit’s determination. The Court has now granted that petition. The case will likely be argued in April and we expect a decision by the end of the Court’s term in June.

New Administration Also Eyeing the Clean Water Rule

It has yet to be seen to what degree the new presidential Administration may impact the fate of the Final Rule. It is possible that Congress or EPA may attempt to rescind the Final Rule, or that EPA and the Corps will not continue to defend the Final Rule in court. Moreover, the Administration has indicated that it would like to repeal the Final Rule:

“For too long, we’ve been held back by burdensome regulations on our energy industry. President Trump is committed to eliminating harmful and unnecessary policies such as the Climate Action Plan and the Waters of the US rule.”[5]

Given that the Final Rule appears to be on the Trump Administration’s agenda, the Court’s decision to hear the case may provide the Administration with additional time to act on the Final Rule.

We will continue to monitor the litigation over the Final Rule and post updates here.