August 2023 Vol. 78 No. 8
Features
Inside infrastructure: Latest ‘WOTUS’ rule upended by Supreme Court
[EDITOR’S NOTE: Eben M. Wyman is a veteran advocate for key underground utility and pipeline associations. He can be contacted at eben@wymanassociates.net.]
Looking at the increasingly high-profile issue of permit reform needed to get important infrastructure projects off the ground, few issues (if any) are as polarizing as the “Waters of the Unites States” (WOTUS) rulemaking.
WOTUS is intended to define the geographic reach of federal agencies’ authority in regulating streams, wetlands and other water bodies under the Clean Water Act (CWA). After the Biden Administration issued the latest “final” rule on WOTUS in January of this year, the rule was immediately challenged in several states before being considered by the U.S. Supreme Court. In fact, the list of opposing states grew to 28 before the Supreme Court took action in late May.
WOTUS has served as a political lightning rod for decades, so perhaps some history would be helpful before describing what the high court did and the expected impacts of the recent decision. The impact upon the underground construction industry, particularly pipelines and cross-country fiber and electric lines, has historically been substantial.
Regulatory history
Following the enactment of the CWA in 1972, the federal government issued regulations in 1975 defining WOTUS to include not only actually navigable waters, but also tributaries of such waters, interstate waters and their tributaries, non-navigable intrastate waters where misuse could affect interstate commerce.
The term “wetlands” is separately defined as areas that are inundated by surface or groundwater at a frequency and duration sufficient to support an abundance of vegetation. Once it has been determined that a wetland is present (due to existing soil, vegetation and hydrology), the next step is to determine if it is jurisdictional, by being “adjacent” to another regulated water.
The WOTUS Rule provides the test for adjacency, as well as for whether a stream is connected to traditionally navigable water. Two main federal agencies have had to develop and issue WOTUS rules, as Democratic and Republican administrations overturn previous versions in order to issue their own WOTUS rule: the U.S. Army Corps of Engineers (Corps) and the Environmental Protection Agency (EPA).
There have been numerous attempts by the Supreme Court to address the definition of WOTUS. In 1985, the court held that a WOTUS definition encompassing all wetlands adjacent to other bodies of water, over which the Corps has jurisdiction, is a permissible interpretation of the CWA.
In 2006, the United States vs. Rapanos decision changed the game. The case surrounded development in three wetland areas on the developer’s property in order to build a shopping center. Warnings from state environmental entities that the area was protected wetlands under the CWA were ignored, and after cease-and-desist orders from the Environmental Protection Agency (EPA) were not followed, EPA filed suit.
The developer, John Rapanos, argued in District Court that the CWA only gives the government jurisdiction to regulate traditionally navigable waters. The government countered that Rapanos’s lands were covered by the CWA as “adjacent wetlands,” under federal interpretation of the CWA, because sites drained into manmade drains eventually emptied into navigable rivers and lakes.
The District Court rejected Rapanos’ argument and upheld the Corps’ regulations, including the wetlands as “waters of the United States.” Eventually, the Sixth Circuit Court of Appeals affirmed, holding that the wetlands to those navigable waters qualifies them as “waters of the United States” under the CWA.
The Rapanos opinion was a split decision that left some room for debate. The “relatively permanent” test set out by Justice Antonin Scalia requires a permanent hydrologic connection to traditionally navigable waters, which would exclude channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall.
In order for an “adjacent” wetland to be considered jurisdictional under this test, it must have a continuous surface connection with the navigable water, making it difficult to determine where the “water” ends and the “wetland begins.” Therefore, the Scalia opinion provides that only those relatively permanent, standing or continuously flowing bodies of water qualify as WOTUS subject to federal regulation, and specifically excludes channels through which water flows intermittently or ephemerally.
On the other side of the argument, the test laid out by Justice Anthony Kennedy did not require a “permanent hydrologic connection.” Rather, Justice Kennedy would require that the wetland possess a “significant nexus” necessary for restoring and maintaining the chemical, physical and biological integrity of navigable waters.
Under Kennedy’s significant nexus test, if a wetland, either alone or in combination with similar lands in a given area, significantly affects the physical, chemical and biological integrity of other covered waters more readily understood as “navigable,” it could be subject to federal regulation.
During the first decade following the Rapanos decision, the agencies largely relied on guidance and interpretation of the 1986 regulations, meaning that federal jurisdiction exists if a water body meets either the relatively permanent standard or the significant nexus standard.
In 2020, the Trump Administration set aside the Obama Administration’s WOTUS rule that never became effective because it was issued at the very end of the Obama administration. Ultimately, the Obama rule was replaced by President Trump’s “Navigable Waters Protection Rule,” which relied exclusively on the “relatively permanent” standard, requiring a connection between wetlands and traditionally navigable waters.
Trump’s WOTUS rule was being actively litigated when Joe Biden won the 2020 presidential election, and Biden’s Justice Department requested a voluntary remand in order to propose a replacement. In December 2021, the Corps and EPA proposed a rule that in many ways favored the Obama rule’s approach but also tried to capture Scalia’s position.
In January of this year, the Supreme Court agreed again to address the WOTUS issue given the increasing confusion, especially over the “relatively permanent” and “significant nexus” standards. The Court’s decision was expected to finally settle the longstanding confusion over the scope and reach of WOTUS.
2023 WOTUS rule
The preamble to the Biden WOTUS Rule attempted to argue that the previous administration’s rule was inconsistent with the CWA – primarily that Trump’s rule failed to appropriately acknowledge or take account of the effects of climate change on the chemical, physical and biological integrity of American waters, and that exclusions to the rule were too broad.
However, recognizing that there were two opinions in Rapanos, the Biden WOTUS Rule provides jurisdiction over waters that meet either the “significant nexus” or the “relatively permanent” standard.
Specifically, the rule defines “waters of the United States” to include the following:
- Traditional navigable waters, the territorial seas, and interstate waters
- Impoundments (bodies of water confined within an enclosure) of “waters of the United States” (i.e., reservoirs)
- “Tributaries” to traditional navigable waters, the territorial seas, interstate waters, or certain impoundments, when the tributaries meet either the relatively permanent standard or the significant nexus standards
- Wetlands “adjacent” to navigable waters; wetlands adjacent to and with a continuous surface connection to relatively permanent impoundments or jurisdictional tributaries when they meet the relatively permanent standard
- Wetlands adjacent to certain impoundments or jurisdictional tributaries, when the wetlands meet the significant nexus standard, and
- Certain intrastate lakes and ponds, streams or wetlands not identified in paragraphs that meet either the relatively permanent standard or the significant nexus standard
Exclusions
The 2023 WOTUS Rule specifically excludes the following categories of waters:
- Waste treatment systems
- Prior converted cropland designated by the Secretary of Agriculture
- Ditches (including roadside ditches) excavated wholly in and draining only dry land and that do not carry a relatively permanent flow of water
- Artificially irrigated areas that would revert to dry land if/when irrigation ceased
- Artificial lakes or ponds created by excavating to collect and retain water used exclusively for activities such as stock watering, irrigation, settling basins or rice growing
- Artificial reflecting or swimming pools or other small ornamental bodies of water created by excavating to retain water for primarily aesthetic reasons
- Water-filled depressions created in dry land incidental to construction activity/excavation on dry land for the purpose of obtaining fill, sand or gravel and
- Swales and erosional features (i.e., gullies) characterized by low volume, infrequent or short duration flow
This list of exclusions is much shorter than those included in the Trump rule.
President Biden’s WOTUS rule also included unwarranted and harmful burdens shouldered on landowners. The rule provides certain steps a landowner can take to determine if a jurisdictional water is present or a permit is required. However, the guidance mostly parrots back the definitions under the WOTUS Rule and, unlike the previous rule, suggests that landowners also bear the burden to evaluate the scope of jurisdiction, without much “guidance.”
While supporters of expanded regulation of American waters believed the Biden WOTUS rule was a big improvement over the Trump version, landowners facing delays, jurisdictional issues and high costs were left without much recourse. Importantly, the Biden administration seemed unconcerned by a pending Supreme Court decision, Sackett vs. Environmental Protection Agency, which many anticipated might mean that the Biden WOTUS Rule would be short-lived.
Sackett case a game-changer
In May, the U.S. Supreme Court overturned EPA’s definition of wetlands that fall under the agency’s jurisdiction. In the Sackett case, the high court sided with an Idaho couple who held that they should not be required to obtain federal permits to build on their property that lacked any navigable water. All nine justices agreed to overturn a Circuit Court ruling that endorsed the Biden administration’s broad WOTUS definition.
Four separate opinions were published that showed a 5-4 split in how far they would allow federal jurisdiction to extend. Conservative Justice Brett Kavanaugh and three of the court’s liberals concurred with the ruling but objected to the majority’s narrow new standard, which they said introduced more uncertainty and would hurt water quality.
The Sackett decision provides a very clear standard that substantially restricts the agencies’ ability to regulate certain types of wetlands and streams. Specifically, wetlands that do not have a continuous surface connection with a navigable water are not federally jurisdictional.
In a statement, President Joe Biden called the decision “disappointing.”
“Today’s decision upends the legal framework that has protected America’s waters for decades,” he said. “It also defies the science that confirms the critical role of wetlands in safeguarding our nation’s streams, rivers and lakes from chemicals and pollutants that harm the health and wellbeing of children, families and communities.”
Justice Elena Kagan wrote a separate concurring opinion with fellow liberal Justices Sonia Sotomayor and Ketanji Brown Jackson that criticized the court for policymaking. The majority in this case invented a standard that laws that impact private property must have “exceedingly clear language,” Kagan wrote, putting “a thumb on the scale for property owners,” and disregarding the public interest in clean water.
Several Republicans in Congress responded to the ruling with enthusiasm. “The Supreme Court’s decision is clearly a decisive win for America’s farmers, small businesses, property owners and those who help build our infrastructure,” U.S. House Transportation and Infrastructure Chairman Sam Graves of Missouri and Water Resources and Environment Subcommittee Chairman David Rouzer of North Carolina said in a joint statement.
Fewer Democrats publicly commented on the ruling, but Sen. Tom Carper (D-Del.), Senate Environment and Public Works Committee chairman, said the decision undermines EPA’s ability to effectively regulate water pollution and puts “America’s remaining wetlands in jeopardy.
“I strongly disagree with the Court’s decision, and I am deeply concerned about the future impacts of this case on clean drinking water, coastal and flood-prone communities and wildlife across our nation,” Carper said.
So, what happens next? EPA and the Corps are likely to develop policy, guidance and new rules to clarify uncertainties that this rule has created over the past few decades. Next steps are likely to include that agencies develop and publish:
- Procedures for permitting evaluations going forward and for permits that have just been issued, permits in process and pending permit decisions.
- Both national and regional procedures for managing permit actions to keep development moving, while simultaneously trying to determine if the action is within the new definition for a “water.”
- Interim guidance on what is considered a “water of the United States.” This will be complex and require substantial time as the agencies wrestle with difficult ecological realities. Considerations may include identifying what constitutes a seasonal intermittent stream, criteria for wetlands to have a continuous surface connection and regional differences in both areas.
- New regulations on what is considered a “water of the United States.” History has shown this to be a laborious and time-consuming process. Adding to the challenge is a nation entering into the 2024 election cycle, where a looming presidential election year threatens the likelihood of anything getting done in Washington.
Because Congress was unable to pass legislation on the WOTUS issue over the years, it has become a popular topic for executive action over the past several presidential administrations. It has also become a political football. Hopefully, the recent Supreme Court decision will put an end to the issue, and the construction industry can continue its work without worrying about unnecessary shutdown of their projects in wet weather situations.
But don’t get too excited – other efforts to restrict construction and energy development are sure to continue, and we will need help in pushing back.
WYMAN ASSOCIATES offers strategic consulting with its clients and direct advocacy before the United States Congress and executive branch agencies. Working with several allies in Washington and around the country, provides clients a constant voice in the national debate.
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