Two federal courts have preliminarily halted the enforceability of the "Clean Water Rule"1 promulgated jointly by the U.S. Environmental Protection Agency ("EPA") and the U.S. Army Corps of Engineers ("Corps") to define anew "waters of the United States," the jurisdictional lynchpin under the Clean Water Act. On August 27, 2015, the United States District Court for the District of North Dakota enjoined enforcement of the Clean Water Rule in at least the 13 States that are parties to the lawsuit, including New Mexico.2 The Sixth Circuit Court of Appeals, on October 9, 2015, stayed the effectiveness of the Clean Water Rule nationwide, pending its analysis of whether it has jurisdiction over the claims raised by 18 states in four consolidated actions.3
The courts were troubled by the broad "ripple effects" of the Rule's bright-line approach to jurisdictional boundaries, particularly the inclusion of remote and intermittent waters as jurisdictional tributaries, and the use of geographic distance as a jurisdictional determinant without sufficient notice or scientific support.
The Clean Water Rule was promulgated on June 29, 2015, with an effective date of August 28, 2015. In the Federal Register preamble to the Rule, EPA and the Corps ("Agencies") stated that the Rule was promulgated to define the scope of waters protected under the Clean Water Act ("Act" or "CWA"), in light of the Act, science, several United States Supreme Court decisions, including Rapanos v. United States,4 and the Agencies' experience and technical expertise.5 The Agencies asserted the Rule would simplify and speed up the permit process through clearer definitions and increased use of bright-line boundaries to establish features that are "jurisdictional by rule" and therefore do not require case-specific analyses of a significant nexus to a downstream water of the United States to establish jurisdiction. The rulemaking included reference to substantial technical analyses. We provide a more detailed analysis of the Rule on our website.
The Court Decisions
The Federal District Court for the District of North Dakota
The day the Clean Water Rule was published, 12 States and the New Mexico Environment Department and New Mexico State Engineer (collectively "States") filed a complaint against EPA challenging the Clean Water Rule, and then a motion for a preliminary injunction, in North Dakota Federal District Court. On August 27, 2015, the day before the Rule would have become effective, the North Dakota federal district court enjoined it. The court first held that it had jurisdiction over the suit, and in so doing rejected the Agencies' argument based on 33 U.S.C. § 1369(b)(1) that jurisdiction lies exclusively in the United States Circuit Courts of Appeals.6 The court next determined that the States had established the four factors necessary for granting a preliminary injunction, i.e., a) whether the movant would have success on the merits, b) the threat of irreparable harm to the movant, c) a balance of harms, and d) the public interest.
Following discussion of the appropriate standard to apply to the merits analysis, the court concluded the States had a "fair chance" of successfully prevailing on the merits. The court also concluded the States would suffer irreparable harm if the Rule was not enjoined, and the balance of harms and public interest favors injunction, and therefore granted the States' motion for preliminary injunction.
The Sixth Circuit Court of Appeals
Another 18 states7 (also "States") filed four separate lawsuits challenging the Clean Water Rule, which were transferred to and consolidated in the Sixth Circuit Court of Appeals by the Judicial Panel on Multi-District Litigation. The States have moved the court to dismiss their petitions for lack of subject matter jurisdiction, under 33 U.S.C. § 1369(b)(1), but also asked the Sixth Circuit to stay the effectiveness of the Clean Water Rule pending the Sixth Circuit's ruling on its jurisdiction.
The Sixth Circuit reasoned that the purpose of the stay was to preserve the status quo and concluded that the status quo "is the pre-Rule regime of federal-state collaboration that has been in place for several years, following the Supreme Court's decision inRapanos…."8 In so doing, the court rejected the argument that, because the Clean Water Rule had an effective date of August 28, 2015, the status quo is leaving the Clean Water Rule in place. In its October 9, 2015 order, the Sixth Circuit applied factors similar to those the North Dakota federal district court applied and granted a nationwide stay of the Rule pending its determination regarding its jurisdiction.
Key Issues on the Merits
The Definition of Jurisdictional Tributaries
The Agencies' definition of all tributaries as jurisdictional by rule purports to rely upon Justice Kennedy's concurrence in Rapanos v. United States,9 which requires the Agencies establish a "significant nexus" with a downstream water of the United States "more readily understood as navigable" in order to exert jurisdiction over upstream tributaries under the Clean Water Act.10 The Agencies also rely upon a 400+ page technical support document and other reports that reference numerous scientific studies of the contributions of headwater and other tributaries to downstream waters.11 Nevertheless, both courts concluded the Agencies overstepped their statutory authorities in defining jurisdictional tributaries too broadly without sufficient support.
The North Dakota federal district court held that the Clean Water Rule violated the Kennedy concurrence test because the Rule "allows EPA regulation of waters that do not bear any effect on the ‘chemical, physical, and biological integrity' of any navigable-in-fact water."12 In part, the court found the Clean Water Rule arbitrary and capricious because it "asserts jurisdiction over waters that are remote and intermittent waters. No evidence actually points to how these intermittent and remote wetlands have any nexus to a navigable-in-fact water."13 The court faulted the Agencies' overly broad definition of "tributary," because it "allows for regulation of any area that has a trace amount of water so long as ‘the physical indicators of a bed and banks and an ordinary high water mark' exist."14 Noting that is precisely the concern Justice Kennedy warned against, the court concluded "the definition of a tributary here includes vast numbers of waters that are unlikely to have a nexus to navigable waters within any reasonable understanding of the term."15 The Sixth Circuit also concluded that the Clean Water Rule's "treatment of tributaries, ‘adjacent waters,' and waters having a ‘significant nexus' to navigable waters is at odds with the Supreme Court's ruling in Rapanos…."16
The Establishment of Geographic Distance as a Jurisdictional Determinant
The North Dakota federal court found to be arbitrary the Agencies' use of a 4,000 foot "bright-line" test for jurisdiction over features that are nearby waters of the United States. The court was "unable to determine the scientific basis for the 4,000 feet standard" where a water situated 4,001 feet away is not similarly situated to warrant being jurisdictional.17 The court continued: "the Rule must be supported by some evidence why a 4,000 foot standard is scientifically supportable. On the record before the court, it appears that the standard is the right standard because the Agencies say it is."18
The Sixth Circuit also faulted the Agencies for failing to identify "specific scientific support substantiating the reasonableness of the bright-line standards they ultimately chose."19
Lack of Notice and Comment on the Geographic Distance Standard
The North Dakota federal district court also ruled that the Clean Water Rule as finally promulgated was not a "logical outgrowth" of the proposed rule because it materially altered the proposed Rule that was circulated for notice and comment "by substituting the ecological and hydrological concepts with geographical distances that are different in degree and kind and wholly removed from the original concepts announced in the proposed rule."20 The court concluded that the Clean Water Rule thus violated the Administrative Procedure Act's notice and comment provisions because "[n]othing in the call for comment would have given notice to an interested person that the rule could transmogrify from an ecologically and hydrologically based rule to one that finds itself based in geographic distance." 21
The Sixth Circuit also warned that the "the rulemaking process by which the distance limitations were adopted is facially suspect" because the proposed rule did not include any distance limitations, unlike the Clean Water Rule as finally promulgated. The Sixth Circuit had the benefit of the administrative record, which it characterized as "extensive," yet the Agencies "failed to identify anything in the record that would substantiate a finding that the public had reasonably specific notice that the distance-based limitations adopted in the Rule were among the range of alternatives being considered." 22
Irreparable Harms, the Balance of Harms, and the Public Interest
The North Dakota federal district court found that the States demonstrated irreparable harm since the States would lose their sovereignty over intrastate waters that would be subject to the Clean Water Act if the Clean Water Rule was not enjoined. In other words: "Immediately upon the Rule taking effect, the Rule will irreparably diminish the States' power over their waters."23 In addition, the court found that the States would suffer an irreparable harm in the form of monetary losses, which the States could not recover because the United States has not waived its immunity from suit. The court cited as examples of monetary harm North Dakota's contention that the Clean Water Rule will require the state to "undertak[e] jurisdictional studies for every proposed natural gas, oil, or water pipeline project" and Wyoming's similar assertion that it would incur additional costs relating to Section 401 certifications of the Act's applicability.24
The North Dakota federal district court next concluded that the balance of harms favored injunctive relief. The court noted that the risk of harm to the States was "imminent and likely" and that delaying the Clean Water Rule's implementation would cause the Agencies "no appreciable harm."25 The court "acknowledge[d] that implementation of the Rule will provide a benefit to an important public interest, both in providing some protection to the waters of the United States and because it would provide increased certainty as to what constitutes jurisdictional waters as some people will be categorically removed from the definition of waters of the United States…."26 The court, however, stated that the benefit would extend to only a small percentage of the public, while a broader segment of the public would benefit from the injunction "because it would ensure that federal agencies do not extend their power beyond the express delegation from Congress." 27
The Sixth Circuit, unlike the North Dakota court, found "no compelling showing" that the States would suffer immediate irreparable harm either as to the States' sovereignty or unrecoverable monetary damages given the limited duration of the stay. The court noted, however, that there also was no "indication that the integrity of the nation's waters will suffer imminent injury if the new scheme is not immediately implemented and enforced."28 The court reasoned that a stay was required given the burden on the public in general, as well as governmental bodies, "implicated by the Rule's effective redrawing of jurisdictional lines over certain of the nation's waters." The court reasoned:
A stay allows for a more deliberate determination whether this exercise of Executive power, enabled by Congress and explicated by the Supreme Court, is proper under the dictates of federal law. A stay temporarily silences the whirlwind of confusion that springs from uncertainty about the requirements of the new Rule and whether they will survive legal testing. A stay honors the policy of cooperative federalism that informs the Clean Water Act and must attend the shared responsibility for safeguarding the nation's waters….In light of the disparate rulings on this very question issued by district courts around the country—enforcement of the Rule having been preliminarily enjoined in thirteen states—a stay will, consistent with Congress's stated purpose of establishing a national policy, 33 U.S.C. § 1251(a), restore uniformity of regulation under the familiar, if imperfect, pre-Rule regime, pending judicial review.29
What Happens Now?
The North Dakota federal district court's preliminary injunction of the Clean Water Rule is effective in the 13 states that joined the lawsuit there. The Sixth Circuit applied its stay of the Rule nationwide, but noted that the stay is for the purpose of "silencing the whirlwind of confusion and uncertainty" while the Rule is legally tested. Further, the issue of the Sixth Circuit's jurisdiction over the matter is expected to be resolved shortly. If either or both cases continue, the parties will address the merits of the case on the full administrative record. The fact that both courts concluded the challenging States were likely to prevail on their claims suggests that the Clean Water Rule may not withstand scrutiny on the merits.
Republican Senators have pursued action in the Senate to try to block the Clean Water Rule as well. Senator John Barrasso (R-Wyoming) sponsored a bill that would have nullified the Clean Water Rule and would have imposed additional consultation requirements on EPA and the Corps when promulgating a new rule. That bill failed to pass. Shortly after that bill failed, Senator Joni Ernst (R-Iowa) proposed a measure that would block the Clean Water Rule, which the Obama administration has threatened to veto.30 Thus, even if the Clean Water Rule survives a judicial challenge, the Rule may face further hurdles in Congress.
In the meantime, the Corps and EPA have confirmed they have "resumed nationwide use of the agencies' prior regulations defining the term ‘waters of the United States.' Those regulations will be implemented as they were prior to August 27, 2015, by applying relevant case law, applicable policy, and the best science and technical data on a case-by-case basis in determining which waters are protected by the Clean Water Act." 31