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Supreme Court Poised to Scrap US Waters Test, Attorneys Say

Oct. 4, 2022, 9:30 AM

The test that the federal government has used to determine what waters and wetlands are protected under the Clean Water Act seems poised to be scrapped by the US Supreme Court, natural resources lawyers said.

The justices mainly wrestled with the definition of the word “adjacent” as they heard oral arguments on Monday in Sackett v. EPA, which focuses on what streams and wetlands qualify as federally protected waters of the US—or WOTUS—under the Clean Water Act. Congress didn’t define “adjacent,” which appears in a parenthetical in US code, when it updated the law in 1977.

Then-Justice Anthony Kennedy’s “significant nexus” test outlined in the court’s fractured 2006 ruling in Rapanos v. U.S. aimed to clarify the adjacency question. The idea meant that any pollution or development causing pollution in a tributary of a navigable river or lake would affect the biology and chemistry of the larger water body.

“I just don’t see five votes for the significant nexus test,” said Jeff Porter, chair of the environmental law practice at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC. “The real question is what will replace it.”

The Environmental Protection Agency and Army Corps of Engineers rely on “adjacency” when determining if a stream or wetland is close enough to a tributary of a larger water body to have a “significant nexus” with it, Justice Department attorney Brian Fletcher said during oral arguments.

The plaintiffs in the Sackett case challenged the test, and though it’s not clear they’re headed for a Supreme Court victory, the justices on Monday searched for a way to clarify which wetlands near federally protected waters fall under federal jurisdiction.

Defining Distance

The case involves Chantell and Michael Sackett of Idaho, who have been attempting for more than 15 years to build a house on land the federal government says includes federal waters.

The federal government contends that wetlands on the Sacketts’ property are waters of the US because they are near a tributary leading to a lake a few hundred feet away that contains federally protected waters.

During the oral arguments, “the conservative justices seemed to be more focused on the problems associated with the significant nexus test, in both its breadth and imprecision,” said Melissa Reynolds, an associate attorney at Holland & Hart LLP in Salt Lake City.

Justice Neil Gorsuch said during oral arguments that if a water is clearly adjacent to a federally protected water, then the significant nexus test isn’t necessary. But he asked Fletcher if an entire watershed could be considered adjacent since all pollutants flow downstream into larger water bodies.

Fletcher said there is no bright line for what’s considered adjacent, and federal agencies don’t want to specify a distance a wetland would need to be away from a federally protected water to avoid being jurisdictional. That’s partly because the hydrology is different in every situation, he said.

“The government’s response that the agencies have numerous guidance documents outlining the factors they’ll consider in determining whether a significant nexus test exists probably didn’t have much sway with the Court,” Reynolds said.

“Justice Roberts and Gorsuch focused on their concern that, if the significant nexus test is the correct test, landowners would have difficulty in determining whether their property could be considered WOTUS and could be subject to significant civil and criminal penalties,” she said.

Clues to Test’s Fate

Justice Sonya Sotomayor asked if another test could be used that is more precise than the significant nexus test.

Her questioning offered a clue that the “significant nexus test is likely gone,” said David Smith, a partner at Manatt, Phelps and Phillips LLP.

The court appears to be pivoting toward using adjacency as one of the ways to define WOTUS, he said.

It’s not clear that the Sacketts will win the case, however. Even some conservative justices seemed to be sympathetic to the idea that wetlands separated from navigable waters by a road or another human-built obstacle would still qualify as federally protected, Smith said.

In Rapanos, then-Justice Antonin Scalia said he thought only waters with a surface connection to larger water bodies could qualify as federally protected.

In Monday’s arguments, “even the more conservative justices felt that the adjacency definition did not require a surface connection,” said Larry Liebesman, a senior adviser at the environmental and water permitting firm Dawson & Associates.

Federalism Issue

Justice Samuel Alito wondered how a broad interpretation of federal waters affects federalism, considering that the federal government is interpreting a parenthetical in US code when it refers to “adjacent” waters.

“Your argument is that with this parenthetical, Congress did something that is of major importance,” Alito said, speaking to Fletcher.

Fletcher said yes, but Alito countered that the government’s understanding of WOTUS seems to be that it includes any water anywhere that has an “ecological effect” on navigable waters.

Agencies appear to have taken a broad provision of federal law “that can be read to give them almost plenary authority and make some pragmatic judgments about how far they want to go based on all sorts of factors, Alito said.

Alito’s questioning put him in a camp among the court’s conservatives “who think there’s a constitutional question here,” Porter said. “But it’s not clear who else is in that group.”

More justices may see the Sackett case as a statutory interpretation question instead of a constitutional question, Porter said.

The case is Sackett v. EPA, U.S., 21-454, argued 10/3/22.

To contact the reporter on this story: Bobby Magill at bmagill@bloombergindustry.com

To contact the editor responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com