SCOTUS Decision Leads EPA to Delay Clean Water Rule 

The U.S. Supreme Court recently issued its much-anticipated decision in National Association of Manufacturers v. Department of Defense. The Court unanimously held that challenges to the Waters of the United States Rule, also known as the “Clean Water Rule,” must be filed in federal district courts.

While the Court’s decision answers an important jurisdictional question, it is unlikely to stem the tide of litigation involving the controversial Clean Water Rule. The Department of Environmental Protection (EPA) recently announced it has added an effective date of January 31, 2020, to the rule. The agency is also crafting its own WOTUS rule, which may also be controversial.

History of the Clean Water Rule

The Clean Water Act (CWA) prohibits the discharge of any pollutants into “navigable waters” without first obtaining a permit. The CWA defines the term “navigable waters” as “waters of the United States, including the territorial seas.” 

In 2015, the Obama Administration promulgated the “Clean Water Rule: Definition of ‘Waters of the United States,’” (WOTUS Rule or Clean Water Rule) to further define the “waters of the United States.” The rule adopted the approach of Justice Anthony Kennedy’s concurring opinion in Rapanos v. United States, 547 U.S. 715 (2006), defining the scope of jurisdictional waters as whether a water or wetland possesses a “‘significant nexus’ to waters that are or were navigable in fact or that could reasonably be so made.”

The broad standard set forth in the WOTUS Rule was immediately subject to litigation. In total, 31 states, the U.S. Chamber of Commerce, and several other interested parties challenged the scope and legal authority of the WOTUS Rule. As a result, the previous definition of “waters of the United States” is currently still in force. In 2016, the U.S. Court of Appeals for the Sixth Circuit issued a stay halting the enforcement of the WOTUS Rule. 

As detailed in greater deal in a prior article, the Trump Administration is also seeking to rescind and replace the WOTUS Rule. Last June, the EPA and Army Corps of Engineers proposed a new rule to rescind the definition of “waters of the United States” in the Code of Federal Regulations and recodify the pre-WOTUS Rule regulations and guidance. According to the agencies, the next step is to adopt a new rule that will define the “waters of the United States” to align with Justice Scalia’s perspective as set forth in Rapanos.

Supreme Court’s Decision

The Supreme Court was tasked with deciding the proper venue for challenging the Clean Water Rule. There are two potential avenues for judicial review of EPA actions. Parties may generally file challenges to final EPA actions in federal district courts. However, the CWA lists seven categories of EPA actions that must be challenged in the federal courts of appeals, including, as relevant to the WOTUS litigation, EPA actions “approving or promulgating any effluent limitation or other limitation under section 1311, 1312, 1316, or 1345,” 33 U.SC. §1369(b)(1)(E), and EPA actions “issuing or denying any permit under section 1342,” 33 U.S.C. §1369(b)(1)(F).

Relying on the text of the CWA, the justices concluded that challenges to the WOTUS Rule must be filed in federal district courts because they do not fall under subparagraph (E) nor subparagraph (F) of §1369(b)(1). With regard to subpart E, the Supreme Court held that the WOTUS Rule is not an “effluent limitation” because it does not impose restrictions on quantities, rates, and concentrations of pollutants discharged into navigable waters. Rather, it merely defines a statutory term. The Court further held that the WOTUS Rule does not fit within subparagraph (E)’s “other limitation” language.

As for subpart F, the Court concluded that the provision does not cover the WOTUS Rule because it neither issues nor denies National Pollutant Discharge Elimination System (NPDES) permits issued under §1342. While the government argued that the Clean Water Rule was “functionally similar” to issuance or denial of a permit because “it establishes the jurisdictional bounds of EPA’s permitting authority,” the Court rejected the argument. According to the justices, the argument was "completely unmoored from the statutory text."

Implication for Future Legal Challenges

The Supreme Court’s decision effectively invalidated the injunction issued by the Sixth Circuit because it did not have jurisdiction to hear the case. The ruling would have also cleared the way for the WOTUS Rule to take effect. However, the EPA announced on January 31, 2018, that it has officially set the effective date of WOTUS rule for 2020. Given that it is actively working on a new rule, the move essentially ensures that the Obama era Clean Water Rule never takes effect.

“Today, EPA is taking action to reduce confusion and provide certainty to America’s farmers and ranchers,” EPA Administrator Scott Pruitt said in a statement. “The 2015 WOTUS rule developed by the Obama administration will not be applicable for the next two years while we work through the process of providing long-term regulatory certainty across all 50 states about what waters are subject to federal regulation.” Pruitt has publicly stated that he expects the replacement rule to be unveiled this spring and take effect by the end of 2018.

While the EPA’s announcement may end challenges to the 2015 WOTUS Rule, any standard adopted by the Trump Administration will also certainly face lawsuits from environmental groups. Those lawsuits must be filed in the federal district courts and are likely to result in divergent rulings. In the end, the Supreme Court may have the final word.

Given that the redefinition of “waters of the United States” may have a profound effect with respect to numerous legal issues related to the CWA, including permitting, regulatory compliance and potential liability matters, we encourage members of the regulated community to stay informed regarding WOTUS Rule developments.

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, at 201-806-3364.