United States: New WOTUS Rule Halted In Half Of Country By Federal District Court

On April 12, 2023, a federal district court judge in North Dakota issued a temporary injunction blocking implementation of the EPA and Army Corps of Engineers regulations redefining Waters of the United States ("WOTUS") under the Clean Water Act ("CWA") (the "2023 WOTUS Rule"). The injunction was issued in a challenge brought by 24 states, and will take effect in those states: Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia, and Wyoming.

The WOTUS definition is one of the most controversial and highly-litigated aspects of the CWA, if not all environmental law, because it has wide-ranging implications. The definition of "waters of the United States" is so important because it sets the jurisdictional limits of the CWA. Under the CWA, EPA and the Army Corps have the power to regulate, among other things, the discharge of pollutants to navigable waters from a point source (33 U.S.C. § 1362(12)) and the discharge of dredged or fill material into navigable waters (33 U.S.C. § 1344). "Navigable waters" are defined in the CWA as "the waters of the United States, including the territorial seas." 33 U.S.C. §1362(7). "Waters of the United States" is not defined further under the CWA, so the agencies have been left to try to craft a definition.

The Army Corps and EPA first proposed a WOTUS definition in 1977 and it has faced revisions and legal challenges ever since. The WOTUS definition has faced Supreme Court review in three previous cases, and is currently pending review in a fourth Supreme Court case, Sackett v. U.S. Environmental Protection Agency, 19-35469, on appeal from the U. S. Court of Appeals for the Ninth Circuit.

The WOTUS definition was revised in 2015 by the Obama Administration to expand the definition and then in 2020 by the Trump Administration to narrow the definition; with both definitions facing swift legal challenges, including vacatur of the Trump rule in 2021. At issue in all of these rules is how to treat non-traditional navigable waters, like ephemeral bodies of water and wetlands.

As we previously reported, the 2023 WOTUS Rule goes back to re-establish the pre-2015 definition of WOTUS, and also incorporates guidance from Justice Kennedy's concurring opinion in the most recent Supreme Court decision, the 2006 case of Rapanos v. U.S., 547 U.S. 715.¹ EPA and the Army Corps are incorporating Justice Kennedy's "significant nexus" test, which provided that wetlands and other bodies of water that have a "significant nexus" to more traditional navigable waters should be included in WOTUS. Id. at 759.

Thus, the 2023 WOTUS Rule includes the following categories of waterbodies: (1) traditional navigable waters (e.g., certain large rivers and lakes); (2) territorial seas; (3) interstate waters; (4) impoundments; (5) tributaries; (6) adjacent wetlands; (7) and additional waters. To determine jurisdiction for tributaries, adjacent wetlands, and additional waters, the 2023 WOTUS Rule looks at whether the body of water meets either the "relatively permanent standard" or "significant nexus standard", as follows:

• Relatively Permanent Standard is a test that readily identifies a subset of waters that will virtually always significantly affect traditional navigable waters, the territorial seas, or interstate waters. To meet the relatively permanent standard, the waterbodies must be relatively permanent, standing, or continuously flowing waters connected to traditional navigable waters or waters with a continuous surface connection to such relatively permanent waters or to traditional navigable waters, the territorial seas, or interstate waters.
• Significant Nexus Standard is a test that clarifies if certain waterbodies, such as tributaries and wetlands, are subject to the Clean Water Act based on their connection to and effect on larger downstream waters that Congress fundamentally sought to protect. A significant nexus exists if the waterbody (alone or in combination) significantly affects the chemical, physical, or biological integrity of traditional navigable waters, the territorial seas, or interstate waters.

Demonstrating just how controversial the 2023 WOTUS Rule was, Congress invoked the Congressional Review Act to try to overturn the 2023 WOTUS Rule in March. The Congressional Review Act allows for overturning regulations if a simple majority of both houses vote in favor. Republicans and a handful of Democrats saw the 2023 WOTUS Rule as an "overreach" and tried to overturn it. However, President Biden vetoed the effort and there was not enough support to override the veto.

Turning to the court challenge, the North Dakota district court judge stated that he was granting the preliminary injunction because the states would "expend unrecoverable resources complying with a rule unlikely to withstand judicial scrutiny." The court conducted a detailed analysis of the various categories of water bodies under the 2023 Rule, and determined "EPA has arguably acted beyond statutory authority" and its "actions are arguably arbitrary and capricious." The court also noted that the definition of WOTUS is currently before the Supreme Court in the Sackett case, and that the issues in Sackett go to the heart of the states' challenge to the 2023 WOTUS Rule. Thus, regardless of what happens in this challenge, all eyes are on the Supreme Court and its pending decision in Sackett. If the Supreme Court rejects the "significant nexus" standard (a fairly likely outcome), EPA and the Army Corps will be back at the drawing board and revising the WOTUS definition once again.

As always, the Corporate Environmental Lawyer Blog will keep you updated on all of the latest developments.

Footnote

1. In Rapanos, the Court did not reach a majority opinion. Justice Scalia authored a plurality opinion, Justice Kennedy wrote a concurring opinion, and Justice Stevens wrote a dissenting opinion.