On June 27, 2017, the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers (ACE) published a proposed rule in the Federal Register announcing a two-step process to review and revise the regulatory definition of “waters of the United States.” In the first step, the agencies propose to rescind the 2015 definition of “waters of the United States”—which is currently codified in the federal regulations—and to recodify the pre-2015 definition. Because enforcement of the 2015 definition is currently stayed by the U.S. Court of Appeals for the Sixth Circuit, the pre-2015 definition presently articulates the agencies’ claimed jurisdiction under the Clean Water Act.
In the second step, the agencies state that they intend to pursue a notice-and-comment rulemaking in which they will conduct a substantive re-evaluation of the definition. Significantly, as part of that re-evaluation, the agencies state in the notice that they “will consider developing a new definition of ‘waters of the United States’ taking into consideration the principles that Justice Antonin Scalia outlined in the Rapanos plurality opinion.”
By way of background, the Clean Water Act prohibits the discharge of any pollutant into jurisdictional waters. “The discharge of any pollutant” is defined by the act broadly to include “any addition of any pollutant to navigable waters,” which in turn are defined in part as “the waters of the United States.” The Clean Water Act imposes criminal liability and civil fines on those who discharge pollutants, including dredge or fill material, into waters of the United States. The scope of the “waters of the United States”—and therefore the scope of the Clean Water Act—has the potential to significantly affect a broad range of commercial, land use, and natural resource development activities.
The agencies’ announcement of their review of the definition of “waters of the United States” follows President Donald Trump’s Feb. 28 executive order entitled “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States Rule.’” Among other items, the executive order requires the EPA and the corps to review the 2015 definition to ensure that the definition keeps the nation’s navigable waters “free from pollution, while at the same time promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of the Congress and States under the Constitution.” Moreover, the executive order requires the EPA and the corps to “consider” interpreting the term “navigable waters” in a manner consistent with the plurality opinion of Justice Scalia in Rapanos. The executive order likely signals a major shift in how the agencies interpret their jurisdiction under the Clean Water Act, which recently has paralleled Justice Anthony Kennedy’s “significant nexus” test, as articulated in Rapanos.
Kennedy’s “Significant Nexus” Test
The U.S. Supreme Court has considered claims of jurisdiction by the EPA and ACE under the Clean Water Act several times, most recently in 2006 in Rapanos v. United States, in which five justices vacated and remanded a district court’s finding that the waters at issue were jurisdictional. The Rapanos decision yielded five opinions, including a plurality garnering four justices written by Justice Scalia and an opinion concurring in judgment written by Justice Kennedy.
In concurring in judgment, Justice Kennedy wrote an opinion in which he advocated for a “significant nexus” test to determine the agencies’ jurisdiction. Specifically, Justice Kennedy wrote that absent more specific regulations, the agencies must establish a significant ecological nexus on a case-by-case basis when they seek to regulate wetlands based on adjacency to navigable tributaries. In other words, waters such as wetlands could be jurisdictional if they “either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as ‘navigable’.” The significant nexus test encompassed the possibility that certain intermittent or ephemeral streams could be jurisdictional.
Over two years later, in 2008, the agencies issued guidance concerning the Rapanos decision, but did not at that time propose to modify the existing regulations. Instead, the agencies endorsed Justice Kennedy’s significant nexus test under the theory that when there is no majority opinion in a Supreme Court case, controlling legal principles may be derived from those principles stated by five or more justices. With respect to jurisdictional waters, the agencies noted that Justice Kennedy espoused a relatively flexible significant nexus test while four of the dissenting justices espoused an even more broad definition of “waters of the United States.” Therefore, the agencies reasoned that at least five justices support agency jurisdiction if a significant nexus is established.
In the 2008 guidance, the agencies stated that they would continue to assert jurisdiction over traditional navigable waters, wetlands adjacent to traditional navigable waters, certain non-navigable tributaries of traditional navigable waters that are relatively permanent, and wetlands that directly abut jurisdictional tributaries. The agencies further clarified that they would use the significant nexus test on a case-by-case basis to determine jurisdiction over non-navigable tributaries that are not relatively permanent, wetlands adjacent to non-navigable tributaries that are not relatively permanent, and wetlands adjacent to but that do not directly abut a relatively permanent non-navigable tributary. Finally, the agencies clarified that they would not assert jurisdiction over swales or erosional features or ditches excavated wholly in and draining only uplands and that do not carry a relatively permanent flow of water.
‘Waters of the U. S.’ Employs Bright-Line Tests
The 2015 rulemaking, first proposed in 2014, advanced a new definition of “waters of the United States” in light of the Rapanos decision. Specifically, the agencies identified three categories of waters:
- those that are always jurisdictional,
- those that are jurisdictional on a case-by-case basis, and
- those that are never jurisdictional
Among those waters considered always jurisdictional by the final rule are traditionally navigable waters, certain tributaries with ordinary high water marks, and waters “adjacent” to certain other jurisdictional waters. The final rulemaking also considers as jurisdictional, on a case-by-case basis, enumerated aquatic features—such as prairie potholes, western vernal pools, and Texas coastal prairie wetlands—and certain waters that occur within 4,000 feet or the 100-year floodplain of certain other jurisdictional waters.
In short, the new definition attempted to clarify the jurisdiction of the agencies “through increased use of bright-line boundaries” in order to streamline the process of identifying which waters the agencies believe are protected by the Clean Water Act. However, many trade associations contend that the new bright-line boundaries are not consistent with the case-by-case significant nexus test articulated by Justice Kennedy in Rapanos, and impermissibly include as jurisdictional waters that do not in fact have a significant nexus to navigable waters.
Upon publication of the 2015 definition, numerous industry and environmental groups challenged the final rulemaking in a plethora of U.S. District Courts and Courts of Appeals. A significant controversy erupted over whether judicial review of the final rulemaking was proper at the district court or appellate court level. Those challenges filed in the Courts of Appeals were consolidated to the Sixth Circuit by the Judicial Panel on Multi-District Litigation. The Sixth Circuit issued a nationwide stay of the final rulemaking on Oct. 9, 2015, after finding that the petitioners had demonstrated a substantial possibility of succeeding on the merits, and issued an opinion finding that judicial review of the final rule is proper in the Courts of Appeals on Feb. 22, 2016. Therefore, the Sixth Circuit nationwide stay remains in effect and the agencies currently enforce the pre-2015 regulations.
Scalia’s ‘Relatively Permanent’ Test
In contrast, Justice Scalia’s opinion in Rapanos would have significantly narrowed the agencies’ jurisdiction under the Clean Water Act. Justice Scalia characterized the agencies’ claim of jurisdiction to include “virtually any land feature over which rainwater or drainage passes and leaves a visible mark.”
Joined by three other justices, Justice Scalia would have limited “the waters of the United States” only to those relatively permanent, standing, or continuously flowing bodies of water forming geographic features that are described “in ordinary parlance” as streams, oceans, rivers, and lakes. Justice Scalia would specifically exclude from the definition those channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall. With respect to wetlands, Justice Scalia opined that only those wetlands with a “continuous surface connection” to bodies that are “waters of the United States”—“so that there is no clear demarcation between ‘waters’ and wetlands”—are jurisdictional. Conversely, those wetlands with only intermittent, or remote, hydrologic connections to jurisdictional waters are not jurisdictional.
Will EPA’s Jurisdiction Shrink?
The agencies’ claimed jurisdiction will likely shrink should they employ Justice Scalia’s “relatively permanent” test. Employing Justice Scalia’s standard will likely mean that permanence of flow is more determinative of whether waters are subject to the Clean Water Act than the cumulative effect non-regular, intermittent flow has on traditionally navigable waters. For example, a smaller, more permanent tributary would appear to satisfy Justice Scalia’s jurisdictional test whereas a more voluminous floodwater that occurs more intermittently would not, even if it has an ordinary high water mark. Moreover, waters that are historically considered jurisdictional based on their adjacency or close distance to other jurisdictional waters or their flood plains or ordinary high water marks may not be considered jurisdictional under the “relatively permanent” test if there is an insufficient hydrologic connection between them and navigable waters. Finally, claimed jurisdiction over the aquatic features enumerated by the 2015 rule, including prairie potholes, western vernal pools, and Texas coastal prairie wetlands, is unlikely to remain if the agencies determine that these features should be excluded entirely or should be evaluated on a case-by-case basis without reference to an aggregate of similarly situated features within the same watershed.
While at this point the agencies have only committed to considering Justice Scalia’s jurisdictional test as advanced in Rapanos, the “relatively permanent” test would mark a significant change in the jurisdiction claimed by the agencies compared to just two years ago. Promulgating Justice Scalia’s jurisdictional test will also presumably involve the agencies in significant litigation, much like the litigation that resulted from the 2015 final rulemaking. Until the new rule proposal is finished, the agencies appear committed to using the pre-2015 rule to ensure continuity.
Michael K. Reer is an associate with the Fort Worth, Texas, office of Harris, Finley & Bogle, P.C. and the manager of the firm’s oil and gas law blog.