Troubled Waters: Clean Water Act Jurisdiction Remains Muddled After New Rule Issued

After years of deliberation, the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers (Agencies) issued their long-awaited final rule last week defining “waters of the United States” (WOTUS) for Clean Water Act (CWA) jurisdiction.  The new rule poses important practical and financial ramifications for a wide range of stakeholders that own, manage, farm, develop or operate on property throughout the nation, as well as for States and local agencies.  It will undoubtedly be the target of immediate litigation and Congressional action because expanded CWA jurisdiction continues to be a hotly contested issue.

The New WOTUS Rule

The Agencies published a draft WOTUS rule last year that generated more than 1.1 million public comments.  The rule was sharply criticized by many commenters for expanding federal jurisdiction beyond the Agencies’ statutory and Constitutional authority, for extending permit requirements to surface features and waters traditionally regulated by States, and for creating greater potential for federal enforcement actions and citizen suits.

The preamble to the final rule claims that CWA jurisdiction is narrower and more clear than existing regulation and, as a result, is less likely to require time consuming case-by-case determinations.  The preamble also asserts that the rule is consistent with statutory authority and with Supreme Court precedent, relying primarily on Solid Waste Agency of N. Cook Cnty. v. United States Army Corps of Eng’rs, 531 U.S. 159 (2001) and Justice Kennedy’s concurring opinion in Rapanos v. United States, 547 U.S. 715 (2006).  Private and public stakeholders can be expected to assert that the final rule does not support such claims.

Although the many features of the final rule are complex and beyond the scope of this alert, a few key aspects deserve mention.  The final rule disclaims jurisdiction over a few water features including “puddles,” certain isolated “ditches,” mining pits, erosion gullies and non-wetland swales.  However, a close reading reveals exceptions that negate or diminish some of these exclusions and, as the rule itself concedes, it expands CWA jurisdiction over many water and wetland features.  For example:

• Any watercourse or drainage, even if ephemeral or intermittent, would be jurisdictional under the new rule if it has a defined bed and bank and ordinary high water mark.
• If there is a jurisdictional water feature on a property, any other water features within 4,000 feet of that feature would be considered jurisdictional if they meet one or more of the “significant nexus” criteria explained below.
• Western vernal pools would be considered jurisdictional if they meet one or more of the “significant nexus” criteria.
• The “ditch” exclusion would not apply if any portion of the ditch were excavated in a tributary, which can be any water that flows directly or indirectly to a navigable water.
• The new rule would authorize shallow subsurface flows to be considered in determining whether an otherwise isolated water has a sufficient nexus for jurisdiction.

A fair reading of the new rule reflects that it adds uncertainty by requiring more studies, more expense, and more case-by-case determinations regarding what features are covered.  It creates a new “significant nexus” test with nine different criteria, any one of which could be sufficient to confer CWA jurisdiction over an otherwise isolated water or surface feature, and each of which could require extensive hydrogeological analysis or other studies.  It also expands potential coverage of “neighboring” or “adjacent” waters, allowing such waters to be jurisdictional if located within 1,500 feet of a navigable water, interstate water, impoundment or tributary.  Although waters beyond the “bright line” distances may not be jurisdictional under the new rule, this disclaimer will likely not apply in many situations.

For these and other reasons, the final rule expands CWA jurisdiction and appears to create more confusion than clarity on whether a water is subject to federal jurisdiction. The final rule is likely to be challenged in court on its scope, jurisdictional predicates, and conformance with Supreme Court precedent and realistic on-the-ground impacts. Unless stayed by judicial action, the final rule will become effective 60 days from its publication in the Federal Register.

Brief Analysis

In Rapanos, five Justices of the Supreme Court held that the Agencies had overreached in their interpretation of their definition of WOTUS and took the Agencies to task on their interpretation of CWA “navigable waters,” noting them to be “beyond parody.”  Id. at 734.   The plurality found the Agencies’ expansive interpretation was not a permissible construction of CWA statutory authority.  Id at 734-39.  Both Rapanos and SWANCC held that the Agencies must exercise less, not more, jurisdiction than they had sought to assert based on their interpretations of statutory authority under the CWA.  More recently, the Supreme Court has similarly rebuked EPA’s attempt to assert expansive jurisdiction without clear Congressional authorization under the Clean Air Act.  See Util. Air Regulatory Grp. v. EPA, 134 S.Ct. 2427, 2444 (2014).

Congress has initiated action to disapprove the Agencies’ expanded WOTUS definition.  Last year the House of Representatives passed H.R. 5078, entitled the “Waters of the United States Regulatory Overreach Protection Act of 2014,” by a vote of 262 to 152.  Such efforts continue in the 114th Congress, as both the House of Representatives and the Senate are considering similar bills.  H.R. 1732, entitled the “Regulatory Integrity Protection Act of 2015,” was recently passed by the House of Representatives by a vote of 261 to 155 and would require that the Agencies withdraw the WOTUS rule and consult with stakeholders, State and local officials and other interested parties to formulate an alternative rule.

The final rule will have significant consequences for landowners, agricultural interests, facility operators, transportation corridors, states, counties and municipalities if it goes into effect.  An increase in the scope of jurisdictional waters would result in a corresponding increase in the need (and accompanying time delay and additional expense) for CWA Section 404 permits, Section 401 certifications, and NPDES permits.  It could also expose landowners and others to potential liability for newly jurisdictional waters under the injunctive relief and penalty provisions of the CWA, including “citizen suit” enforcement, for which a discharge to “waters of the United States” is a jurisdictional prerequisite.  It will also increase the burden on the Agencies, and their State and local counterparts, which are already often understaffed, underfunded and unable to process permits, verify delineations, conduct inspections or perform other statutory requirements in a timely fashion.

Impacted stakeholders and their representative associations are likely to challenge the final rule, seeking to stay the effective date pending full judicial review.  We fully expect that there will be many more developments – in court, Congress and the Agencies – before the murky waters of Clean Water Act jurisdiction become clearer.