WOTUS Update: While Supreme Court Case Still Pending, EPA Issues New Rule
On the eve of 2023, the Environmental Protection Agency (EPA) announced a final rule modifying the definition of "waters of the United States" (WOTUS), a key term of the 1972 Clean Water Act that has fueled much passion for courts, agencies, and environmental law practitioners over the last 50 years. In the published final rule, EPA seems to appeal to the Supreme Court justices as they deliberate on the outcome of Sackett v. EPA, a case that could gut parts of the new rule.
The new rule language returns to some pre-2015 concepts for jurisdictional wetlands, providing that wetlands may be considered adjacent to jurisdictional waters and thus jurisdictional themselves if they are connected to those jurisdictional waters with "relatively permanent" surface water connections or if they have a "significant" hydrologic or ecological "nexus" to those waters. The new rule's language does appear to be more protective of the country's waters than the Trump-era rule but does not necessarily bring the clarity that some had hoped for.
The definition of "waters of the U.S." in the Clean Water Act is central to its enforcement but has always been unclear. The question has begged for a legislative fix, but even before the current political logjam, amendment of the Clean Water Act has been a "third rail" issue. The U.S. Army Corps of Engineers and EPA have tried to bring clarity to the term WOTUS through multiple rulemaking efforts, which, in turn, have resulted in continuous judicial challenges and reversals and a fragmented regulatory landscape (you can find a fairly comprehensive overview of the WOTUS history here), highlighted by the 4-1-4 split decision in Rapanos v. United States.
Post-Rapanos, courts, agencies and landowners struggle with which test to apply between Justice Kennedy's significant nexus test and Justice Scalia's surface connection test. More recently, the Obama administration tried to enact its own rule expanding on Justice Kennedy's approach, which was challenged in court and rescinded by the Trump administration. The Trump administration then issued its own rule following Justice Scalia's reasoning, which was then challenged in court and rescinded by the Biden administration, and in the midst of all of this, the Supreme Court agreed to review Sackett v. EPA in a matter questioning whether certain wetlands are "waters of the United States." In that case, several justices were skeptical about the way jurisdiction is applied to wetlands, noting the apparent complexity of relevant criteria and inconsistent results, leaving landowners in a difficult position.
To the disappointment of certain conservative groups, the new rule does not adopt a bright line approach based on distance or another firm criterion and instead goes back to a more nuanced approach to wetland jurisdictional determinations, noting that wetlands' impacts on other waters of the U.S. can vary by region, topography, and climate. Those groups and many Republicans in Congress have also argued that EPA should have waited for the Sackett decision to be released to avoid a conflicting ruling. The new rule does adopt a new criteria to apply the "significant nexus" test and stipulates that a smaller water body such as a wetland must have a "material influence" on a larger one to be considered jurisdictional.
The "significant nexus" test is central to the Sackett case, making the new rule vulnerable to an adverse Supreme Court decision, but the Court has a number of options in terms of their ruling that could produce significantly different outcomes for the rule. The Justices could decide that the new rule makes the case moot and issue no decision, or they could issue a very narrow ruling focused on the facts of the Sackett case: whether a wetland physically separated from a jurisdictional water by a berm is itself jurisdictional. Finally, conservative justices could firmly adopt Justice Scalia's test from Rapanos and hold that only wetlands with relatively permanent surface connections to downstream waters are jurisdictional, which would likely send EPA back to the drawing board. Also looming in the background is the recent decision from the Ohio Supreme Court to end the use of the "Chevron" deference giving credence to agency interpretations of ambiguous statutes. Were the U.S. Supreme Court to follow suit, the EPA may be in a tougher spot to defend its rule.
The new rule will become final 60 days after its publication in the Federal Register, and the Supreme Court could very well rule before then, adding another chapter to the WOTUS saga. Even if the Supreme Court left the new rule mostly untouched, further judicial challenges would be certain to come. In the meantime, landowners will likely continue to struggle with jurisdictional determinations, and Congress will continue to avoid resolving the issue with a legislative fix.