Supreme Court Ruling a Wild Card in Second EPA Waters Rulemaking

Uncertainty over whether a forthcoming Supreme Court ruling will upend federal Clean Water Act jurisdiction over streams and wetlands has attorneys expecting the EPA to reconsider its plans to write a second new definition of waters of the US in late 2023.

The EPA in December finalized a rule that maintains wide federal protections of waters and wetlands. The Trump administration vastly lifted those protections, and the new rule mostly reverts federal water jurisdiction to its status covering a wide array of streams and wetlands prior to 2015. A federal court tossed out the Trump rule in 2021.

The Biden administration has plans to propose a second new definition of waters of the US, or WOTUS, in the fall, according to the federal government’s most recent regulatory agenda published in December. The EPA would aim to finalize that proposal in 2024, according to the agenda.

The second rulemaking is scheduled to follow the Supreme Court’s ruling in Sackett v. EPA, expected later this year, which could upend some of the principles that underlie how the federal government decides whether the Clean Water Act applies to certain wetlands and waters.

Keeping the second rulemaking on the regulatory agenda “provides the agency with an opportunity to make changes on their own schedule should they need to respond to an adverse Supreme Court decision,” said Anna Wildeman, counsel at Troutman Pepper Hamilton Sanders LLP in Washington.

EPA declined to comment about its intentions for the second rulemaking due to the pending litigation, an agency spokesman said in an email.

Grappling With ‘Adjacent’ Waters

Sackett grapples with whether streams and wetlands “adjacent” to large water bodies fall under federal Clean Water Act jurisdiction using the “significant nexus” test established in a related 2006 Supreme Court ruling. Waters adjacent but not directly connected to a navigable waterway must have a substantial effect on the chemical, physical or biological integrity of the larger water body.

The high court’s conservative majority was skeptical of the test during October oral arguments in Sackett. Attorneys urging the court to scuttle the test said in a Jan. 9 letter to the court that Congress intended for “adjacent” to mean contiguous, not connected hydrologically in other ways such as underground.

The EPA said in the December 2023 WOTUS rule that it intends for the rule to be “durable” enough to withstand challenge because it is based on longstanding regulations and Supreme Court case law.

The focus on durability means EPA may avoid the second rulemaking, said Larry Liebesman, a senior adviser at the environmental and water permitting firm Dawson & Associates. “The agencies’ description of the rule as durable as supported by an extensive record suggests that they may not do a second rule,” he said. “We will see.”

Even if the court leaves the “significant nexus” test intact and the 2023 WOTUS rule is able to stand following the Sackett ruling, so many wetlands now fall under federal protection that it’s unclear what else a second WOTUS rulemaking could protect, Wildeman said.

Other than a few clarifying tweaks, “it’s hard to imagine what more the agencies could accomplish with a second rulemaking,” she said.