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High Court Washes Down Agency Water Rule

On January 22, 2018, the United States Supreme Court came down with its ruling on a narrow procedural issue on the Clean Water Act’s “waters of the United States” (WOTUS) rule, promulgated by the U.S. EPA and the Army Corps of Engineers in 2015. The Court ruled unanimously that there is no original and exclusive appellate court jurisdiction over judicial review of WOTUS; rather, judicial review must originate in the United States district courts, in which several cases are on hold challenging the rule. (National Association of Manufacturers v. Department of Defense, No. 16-299.)

The WOTUS rule outlines federal agency jurisdiction over a variety of waters, mostly wetlands, that are categorically regulated (traditionally navigable waters), case-specific (having a significant nexus with such traditional waters), or categorically excluded from regulation (puddles). Many felt the 2015 WOTUS rule strayed too far from commerce clause cases in overregulating private lands.

The Clean Water Act allows direct appellate review of only certain agency rules (33 U.S.C. §1369(b)), e.g., effluent limitations, other limitations, or issued or denied permits.

The Court held the “limitations” verbiage referred to numerical or design limits on the discharge of pollutants under the Clean Water Act’s “end of the pipe” discharge program. The Court held the definition of waters covered under the Clean Water Act alone does not involve such limits, and it rejected the government’s “practical effect” argument.

The Court also held the definition in the WOTUS rule was not a permit and rejected the “functionally similar” argument of the government. In light of the plain language of the Clean Water Act, the Court also rejected the government’s policy arguments of efficiency through quick, original, and exclusive appellate court review.

The net result is that the Sixth Circuit ruling, which originated the case (and issued a nationwide injunction against the WOTUS rule), was reversed and remanded, soon allowing a number of district court challenges now on hold to proceed case by case under the Administrative Procedure Act. Unless delayed by the administration or a court, the 2015 WOTUS rule could soon be in effect in many states.

The decision was a victory for strict constructionists and a loss for the government’s desire for a consolidated appellate review of WOTUS rules. Now the challengers must wade their way through several district courts and up different appellate courts, to be finally resolved again by the Supreme Court.

The Court did little on the substance of the WOTUS rule itself except to say the rule is “contentious and difficult” and cited in dicta several prior Supreme Court rulings on waters of the United States. These cases include Riverside Bayview Homes (water regulated if adjacent to traditional waters), SWANCC (isolated waters not regulated), and Rapanos (a “significant nexus” test over regulated waters). The Court declined to abide by the government’s label of “Clean Water Rule” in the case and used the phrase "WOTUS." Interestingly, deceased Justice Antonin Scalia’s flowing-water test from the Rapanos plurality opinion was not mentioned. Meanwhile, the administration has proposed to extend the effective dates to the 2015 WOTUS rule for two years while the courts and new WOTUS rulemaking (currently with the administration favoring Justice Scalia’s flowing-water test) proceed.

What does all this mess mean? Some states could soon be subject to the broad 2015 WOTUS rule even though delay actions on the rule are pending or in place in some areas of the country. Groups could challenge the Corps for not regulating some wet areas that are arguably newly regulated under the rule, or the Corps could soon be using the rule selectively to regulate more expansively. However, it is difficult to say in states like Louisiana whether a particular land is newly subject to wetland regulation or not. We will certainly be in a mess for some time while this all plays out. So keep a lookout in the Federal Register for more WOTUS rulemaking to comment on. Texas, Louisiana, and Mississippi have a WOTUS lawsuit in the mix. That case was administratively closed by the District Court in 2017, but it can be reopened by any party upon their filing a motion subsequent to the Sixth Circuit’s order on remand.

© 2018 Jones Walker LLP

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About this Author

Stanley Millan, Litigation Attorney, Jones Walker Law Firm
Special Counsel

Stan Millan is a member of the firm's Business & Commercial Litigation Practice Group, and he divides his practice between transactional and litigation work. His practice consists of environmental law, administrative law, green and government contracts law. He is LEED® AP-certified by the U.S. Green Building Council. Mr. Millan's practice extends to the entire panoply of air, water, and waste regulation, including compliance counseling and defense before the U.S. Environmental Protection Agency (EPA), the Louisiana Department of Environmental Quality (LDEQ), and...

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Alex Prochanska, Jones Walker Law Firm, Business and Real Estate Attorney
Special Counsel

Alex Prochaska is special counsel in the firm’s Business & Commercial Transactions and Real Estate Practice Groups in the Lafayette and Baton Rouge offices. Mr. Prochaska’s practice focuses on environmental law, including regulatory issues involving permitting and compliance, transactions, and environmental litigation.

Prior to joining Jones Walker, Mr. Prochaska spent six years as an attorney with the Louisiana Department of Environmental Quality (LDEQ) with the last two as Special Counsel to the Assistant Secretary of the Office of Environmental Services.  In this role, he represented LDEQ in dealings with permit applicants and consultants from the initial pre-permit meetings and through other stages of the application review process, decisions, and defense of judicial challenges to LDEQ permit decisions.  Mr. Prochaska frequently attended public hearings related to draft permits and reviewed Environmental Assessment Statements and associated "IT Questions."  He worked with LDEQ permit writers and legal staff in drafting Responses to Comments (RTCs) and Basis For Decisions (BFDs) in connection with permits for both "greenfield" projects and major modifications and expansions of existing facilities. 

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