Water Permitting Uncertainty Remains as Industry Blasts EPA Rule

The EPA’s move Tuesday to redefine which waters and wetlands are federally protected under the Clean Water Act did little to clarify the confusion that has reigned since the US Supreme Court limited the administration’s authority, natural resources attorneys say.

Oil, agriculture, and development industry groups accused the Biden administration of defying the high court’s ruling in Sackett v. EPA, suggesting legal battles over federal waters jurisdictions will continue for some time. The May decision overturned the legal basis for previous definitions of waters of the US, or WOTUS.

“We just have uncertainty,” and only Congress can now offer clarity about which waters are protected under the Clean Water Act and which aren’t, said Shawn Zovod, partner at Troutman Pepper Hamilton Sanders LLP in San Francisco.

With its new final rule, the Environmental Protection Agency took a “legal scalpel” to its previous federal waters definition, released in January, but otherwise left it “intact and said that because this is nondiscretionary, we don’t have the authority to tackle more complex parts of the Sackett case,” Zovod said.

The agency aimed to align EPA regulations with the Supreme Court ruling by removing the “significant nexus” test, which the justices struck down. The test determined which waterways and wetlands fall under federal jurisdiction. The ruling is expected to allow unpermitted development in wetlands across the country.

The post-Sackett rule implements the court’s opinion that the Clean Water Act protects only waters and wetlands that are relatively permanent and have a continuous surface connection to navigable waterways, such as the Potomac or Mississippi rivers.

The EPA did what it said it would do after the Sackett ruling: Carve out the significant nexus test and eliminate the provision that said wetlands “adjacent” to certain waters are protected, Zovod said.

Case-by-Case

The rule creates two separate WOTUS standards depending on the state, roughly splitting the country in half. The new rule applies in 23 states and the District of Columbia. Federal courts enjoined the January rule in the other 27 states. In those states, the EPA is applying a waters standard that was in effect before 2015, plus constraints outlined in the Sackett ruling.

EPA officials said Tuesday that what actually counts as a federally protected wetland or waterway will need to be determined on a case-by-case basis.

The Waterkeeper Alliance, an environmental group, called on Congress to protect newly vulnerable waters following the Sackett ruling.

“Congress and local elected officials must now step in and do more to protect clean water through durable legislation and state-based action,” Marc Yaggi, Waterkeeper Alliance CEO, said in a statement.

Litigation Brewing

What counts as WOTUS has been litigated for decades, and the new rule is expected to spark even more lawsuits, as industry groups accuse the EPA of ignoring the Sackett ruling.

“This revised rule does not adequately comply with Supreme Court precedent and with the limits on regulatory jurisdiction set forth in the Clean Water Act,” and “defies” the law, said Courtney Briggs, chair of the Waters Advocacy Coalition, which includes the American Petroleum Institute, the American Farm Bureau Federation, and dozens of other industry groups.

Briggs, the senior director of government affairs for the Farm Bureau, said the group is particularly concerned that the EPA didn’t clearly define “relatively permanent” waters. She said the EPA stated in 2008 that relatively permanent waters should run at least one season per year, but the post-Sackett rule doesn’t clarify the January rule’s suggestion that other waters that flow less often could also qualify.

The new rule is a “missed opportunity,” she said, declining to say whether the Farm Bureau would challenge the rule in court.

The coalition said EPA also “blocked” public comment on the rule, which was immediately finalized, Briggs said.

That’s a likely basis for litigation, said Dietrich Hoefner, partner at Lewis Roca Rothgerber Christie LLP.

The EPA finalized the post-Sackett rule without first issuing a draft for public comment, under the rarely used “good cause” exception to notice-and-comment under the Administrative Procedure Act. The exception allows federal agencies to forgo public comment when officials think that a rule update is sufficiently urgent.

The Sackett ruling undermined the existing WOTUS regulation, leaving no legal rules in place to govern wetlands and waterways.

“We believe interest groups may challenge this determination, arguing that there is more than one way for the agencies to implement the Sackett decision, and that the agencies should hear from the public on alternative approaches,” Hoefner said.

Environmental groups said they believe the rule is on solid legal ground, reflecting Sackett.

The rule mirrors the Sackett ruling, overturning decades of law and practice that protected waters across the South, Kelly Moser, senior attorney for the Southern Environmental Law Center, said in a statement.

The EPA made a “surgical fix” to the January rule, said Jim Murphy, director of legal advocacy for the National Wildlife Federation.

“EPA was basically forced into this by the Sackett ruling, and I think they did what was required of them,” Murphy said. “It’s a huge blow to the nation’s waters.”