The Meandering Course of the Clean Water RuleThe Clean Water Rule, also known as the Waters of the United States Rule, has been controversial since it was first proposed. It was opposed in multiple judicial forums when it was finalized in June, 2015. The Trump Administration has taken steps to repeal and replace the Rule. The latest chapter in the ongoing saga is the issuance by the EPA and the Corps of Engineers (the Agencies) of a Supplemental Notice of Proposed Rulemaking (Notice), which provided further justification of its effort to repeal the Rule.
Ever since Justices Scalia and Kennedy muddied the waters in the 2006 Rapanos decision, the extent of the Agencies’ jurisdiction over ‘waters of the United States’ has been the subject of much debate. The Rule was touted by the Agencies as providing much needed ‘regulatory certainty.’ Many felt, though, that the Rule expanded the definition of ‘waters of the United States’ by including waters that were never intended to be within the scope of the Clean Water Act (CWA). For example, tributaries were defined to include any water that contributes flow, directly or indirectly, to a traditional navigable waterway and that is characterized by the presence of a bed and banks and an ordinary high water mark. This definition included many waterways, and their adjacent wetlands, that were not previously subject to regulation.
After the Rule was issued, chaos ensued. Multiple petitions for review were filed in numerous district and appellate courts across the country. At the district court level, a court in North Dakota issued a stay of the Rule, but only as to the states involved in the litigation. At the appellate court level, the petitions were consolidated at the Sixth Circuit, which stayed the Rule almost immediately, finding that the petitioners were likely to succeed on their claims that the rule exceeded the Agencies’ authority under the CWA. However, when the Supreme Court ruled that the appellate courts had no jurisdiction, the nationwide stay was put into question. The Agencies came to the rescue, though, adopting the Applicability Rule, which created an effective date of February 6, 2020 for the Rule.
Meanwhile, an executive order was issued on February 28, 2017 which required that the Agencies review the Rule. Among other things, the Agencies were required to consider defining the scope of jurisdiction in a manner similar to the approach announced by Justice Antonin Scalia in Rapanos case. In that case, Justice Scalia stated that jurisdiction extended to waters that are navigable in the traditional sense, relatively permanent, standing, or continuously flowing bodies of water, and wetlands with a continuous surface connection to those relatively permanent waters.
The Agencies announced a two-step process to implement the executive order. In Step One, the agencies would repeal the Rule and re-institute the rules as they existed prior to issuance of the Rule. In Step Two, the agencies would propose a new definition that would replace the approach in the Rule, taking into consideration the principles that Justice Scalia outlined in Rapanos. As to Step One, EPA published a Proposed Rule in June, 2017 to repeal the Rule and recodify the exact same regulatory text that existed prior to the Rule. 82 Fed. Reg. 34900 (July 27, 20178).
The Supplemental Notice
The Notice provides further justifications for the Agencies’ Step One proposal to repeal the Rule and re-codify the prior regulatory text. 83 Fed. Reg. 32227 (July 12, 2018). The stated purpose of the Notice is for the Agencies to clarify and supplement the rationale for the repeal of the Rule while seeking additional comment. Comments must be received before August 18, 2018.
In the Notice, the Agencies provide their view of how to achieve ‘regulatory certainty,’ stating that the Proposed Rule of June, 2017 “is based on our view that regulatory certainty may be best served by repealing the 2015 Rule and re-codifying the preexisting scope of CWA jurisdiction.” 83 Fed. Reg. at p. 32237. To support this view, the Agencies suggested, among other things, that the Rule fails to achieve regulatory certainty, the Rule may exceed the Agencies’ authority under the CWA, and the findings and assumptions supporting the Rule are not correct.
According to the Agencies, the Rule “does not appear to achieve one of its primary goals of providing regulatory certainty and consistency.” 83 Fed. Reg. at p. 32238. Instead, developments indicate that maintaining the Rule “would produce substantial uncertainty and confusion among state and federal regulators and enforcement officials, the regulated public, and other interested stakeholders.”
In the three courts that have substantively considered the Rule (the Sixth Circuit and district courts in North Dakota and Georgia), each has stated that there is a substantial likelihood of success on the merits. Thus, as the two district court cases in which 25 states are involved move forward, there is the possibility that all or part of the Rule will be vacated, leaving “different regulatory regimes being in effect in different parts of the country, which would likely lead to substantial regulatory confusion, uncertainty, and inconsistency.” 83 Fed. Reg. at p. 32238. Further, statements and comments, most importantly from several States, indicate substantial disagreement and confusion as to the scope of the Rule. The repeal of the Rule, and reversion to the prior rules, will serve to reduce disagreement and confusion as the Agencies have a great deal of experience in implementing and enforcing the rules that were in effect before the Rule was finalized.
The Agencies also expressed concern that the Rule may exceed the Agencies’ authority under the CWA. One possible exceedance discussed by the Agencies is the seeming expansion of the ‘significant nexus’ standard advanced by Justice Kennedy in Raponos. Justice Kennedy wrote that “adjacent wetlands possess the requisite nexus, and thus come within the statutory phrase ‘navigable waters,’ if the wetlands, 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.’” 83 Fed. Reg. at p. 32240, citing Rapanos. The Agencies felt that it was “reasonable to presume that that the Justice did not mean ‘similarly situated’ to be synonymous with ‘all’ waters in a region.” 83 Fed. Reg. at p. 32240. In the guidance issued by the Agencies after the Raponos decision, the Agencies interpreted the term ‘similarly situated’ more narrowly to “include all wetlands adjacent to the same tributary.” 83 Fed. Reg. at p. 32240. However, the Agencies expressed a concern that the Rule substantially broadened the term ‘similarly situated’ by adopting a true regional approach which included all wetlands in the entire watershed. This watershed approach is well beyond the narrower view that ‘similarly situated’ includes only wetlands adjacent to the same tributary.
The Agencies also expressed concern that the findings and assumptions supporting the Rule are not correct. Originally, the Agencies concluded that, under the Rule, there would only be a modest increase in positive jurisdictional determinations (between 2.84 and 4.65 percent) when compared to those made under the Rapanos Guidance. However, the Agencies announced they are reconsidering the validity of this conclusion, citing the economic analysis for the Rule in which it was estimated that 34.5 percent of negative jurisdictional determinations under the Rapanos Guidance would become positive jurisdictional determinations under the Rule.
The Agencies’ Step One approach to repeal the Rule and put in place the prior regulation seems to be nearing its completion. A response to comments on the Notice and the issuance of a final rule would seem to complete Step One. The Agencies will then focus on the Step Two proposal, which is supposed to be based on Justice Scalia’s view of jurisdiction as expressed in Rapanos. The Step Two proposal was sent to the Office of Management and Budget for review on June 15, 2018. Presumably, it will be issued as a proposed rule in the near future.
The Rule was proposed in 2014 and finalized in 2015, prompting litigation in multiple courts across the country. The efforts to repeal the Rule, replace it with the prior regulation, and revise the definition of ‘waters of the United States’ are ongoing. Once the Step One and Step Two rules are finalized, the inevitable litigation will extend for many years thereafter.
The course of the efforts to establish the correct balance of CWA jurisdiction over ‘waters of the United States’ has been a meandering one. It is likely to take multiple twists and turns before ever getting straightened out.