The Nickel Report

WOTUS, an acronym that has received a lot of attention in recent years, stands for the “waters of the United States.” When Congress enacted the Clean Water Act (“CWA” or the “Act”) in 1972, it prohibited “the discharge of any pollutant by any person” into navigable waters without a permit. The Act defines navigable waters as the “waters of the United States, including the territorial seas.” 33 U.S.C. §§ 1311(a), 1362(7), (12). But Congress failed to, in turn, define the words “waters of the United States,” and the Supreme Court has noted that these “words themselves are hopelessly indeterminate.” Sackett v. EPA, 132 S. Ct. 1367, 1375 (2012) (J. Alito, concurring). The meaning of these words matters because violations of the CWA are subject to substantial criminal and civil penalties, so knowing whether a feature on your site is a WOTUS subject to federal jurisdiction has important consequences.

The U.S. Army Corps of Engineers and the Environmental Protection Agency (jointly, the “Agencies”) have promulgated, from time to time, regulations to define WOTUS. The Supreme Court has rejected the Agencies’ prior attempts to interpret the term “as [providing] an essentially limitless grant of authority.” See Rapanos v. United States, 547 U. S. 715, 732–739 (2006) (plurality opinion); Solid Waste Agency of Northern Cook Cty. v. Army Corps of Engineers, 531 U. S. 159, 167–174 (2001).

In 2015, seeking to “clarif[y] the scope of ‘waters of the United States’” the Obama Administration promulgated a rule defining the term WOTUS for all CWA programs. 80 Fed. Reg. 37,054 (June 29, 2015). Coined the “Clean Water Rule” by the Agencies during their extensive lobbying in support of the rule, the rule was immediately challenged by multiple parties, including 31 States, 54 business and municipal petitioners, and environmental NGOs, in numerous forums across the country. The rule was stayed by a district court shortly thereafter, and, nationwide, by the Sixth Circuit, just six weeks later. The Sixth Circuit expressed concern with the legality of the “Clean Water Rule” and found that the “[States] have demonstrated a substantial probability of success on the merits of their claims.” In re EPA, 803 F.3d 804, 807-09 (6th Cir. 2015). Similarly, the North Dakota District Court stayed the rule in thirteen States, finding the States “likely to succeed” because “it appears likely that the EPA has violated its Congressional grant of authority in its promulgation of the Rule” and “failed to comply with [APA] requirements when promulgating the Rule.” North Dakota v. EPA, 127 F. Supp. 3d 1047, 1051 (D.N.D. 2015).

The rule has been stayed for the past two years nationwide while the parties have litigated the issue of where challenges to the “Clean Water Rule” should be brought – federal circuit court or federal district court. There are important reasons why this matters. For example, if challenges must be brought in circuit court, parties must file suit within 120 days of promulgation of the rule, or they may later be barred from challenging the rule. This particular issue has made for some atypical bedfellows, with industry and environmental groups arguing that the challenges should be heard by the district court, and the government (and other environmental groups) taking the position that the circuit courts have jurisdiction. The Supreme Court heard oral argument on October 11, 2017, and is expected to issue a decision by the end of the year, or in early 2018. The Court’s decision will guide where challenges to future definitions of WOTUS, or challenges to any repeal of the “Clean Water Rule”, should be brought.

In the meantime, important regulatory developments are underway that are certain to influence what happens next. Earlier this year, recognizing the substantive and procedural flaws of the rule, President Trump signed an Executive Order directing the Agencies to review the “Clean Water Rule” and, as appropriate, publish a proposed rule rescinding or revising the rule, consistent with the Administrative Procedure Act (“APA”) and the CWA.

The Agencies have done just that, through an anticipated two- step process. First, the Agencies have proposed a rule to repeal the “Clean Water Rule” and recodify the prior regulatory text. 82 Fed. Reg. 34,899 (July 27, 2017). This proposal is intended to provide regulatory certainty, as the Agencies proceed toward the second step, a substantive reevaluation of the appropriate scope of WOTUS. Id. Over 700,000 public comments were submitted on the proposal to repeal the “Clean Water Rule.” The Agencies are presently reviewing these comments and preparing a response to comments, as they make a determination whether to finalize the repeal and recodify the prior regulations. Litigation is certain to follow any final action.

At the same time, the Agencies are considering the elements of a new WOTUS rule, focusing on the important roles designated to the States and the federal government in the Constitution and the CWA and Supreme Court precedent. The Agencies completed federalism and tribal consultations earlier this year, and a series of listening sessions geared towards small entities, environment and public advocacy groups, various industry groups, academia, and the general public are underway. The Agencies are also accepting written recommendations to inform a future rulemaking. This is an important opportunity for the public to present its views on what matters for a new definition, for example, which features are subject to Federal (or State) jurisdiction and which features should be excluded from CWA regulation, in accordance with the statute, Congressional intent, and the Constitution. At some point in 2018, the Agencies anticipate proposing a new definition pursuant to the APA. That proposal will be subject to public comment, and, assuming a new rule defining WOTUS is finalized, that rule is likely to be challenged by numerous groups and eventually make its way to the Supreme Court.

The CWA’s “reach is ‘notoriously unclear’ and the consequences to landowners even for inadvertent violations can be crushing.” U.S. Army Corps of Eng’rs v. Hawkes Co., 136 S. Ct. 1807, 1816 (2016) (Kennedy, J., concurring). Drawing clear jurisdictional lines in a new rule will, therefore, be critical to ensure the efficient administration of the CWA, and to provide regulated parties with fair notice, particularly in light of the civil and criminal penalties that can be imposed under the CWA.

Stand by – there is certain to be much more to come on this important issue.