EPA Rule for State Water Pollution Authority Destined for Court

An EPA rule finalized last week that restores states’ veto power over pipelines and other major river-polluting projects is expected to face legal challenges before the dust settles, natural resources attorneys say.

“EPA’s water quality certification rule is most certainly heading to court,” said Jeff Porter, chair of the environmental law practice at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC in Boston.

“EPA has not only reversed the Trump Administration EPA’s attempt to limit the roles of States and Tribes in Federal Clean Water Act permitting, it has gone a considerable distance in the other direction,” Porter said in an email Friday.

The Environmental Protection Agency’s new Clean Water Act Section 401 Water Quality Certification Rule, which takes effect in November, governs the state approval process for federally-permitted infrastructure projects that have the potential to pollute rivers or other streams considered waters of the US, or WOTUS.

The law gives states the right to certify those projects, but the Trump administration rescinded an earlier rule giving states veto power, neutering their ability to do so in order to facilitate new development, including fossil fuels projects.

The scope of the new rule was reduced following the Supreme Court’s May ruling in Sackett v. EPA, which cut the number of streams and wetlands that are federally protected as WOTUS.

The new rule allows states to certify whether a project will “comply with applicable water quality requirements.” It limits the state’s evaluation of a project to “water quality-related impacts from the activity subject to the Federal license or permit,” and by default gives states six months to register their objections to a project.

‘Bureaucratic Activism’

Republicans who championed the now-rescinded Trump-era rule on Friday declared the new rule to be a major roadblock to new development that enables “bureaucratic activism.”

“This new rule still allows for states to single-handedly torpedo crucial development of interstate energy and infrastructure projects for reasons unrelated to the Clean Water Act,” Reps. Sam Graves (R-Mo.) and David Rouzer (R-NC) said in a statement Friday.

The EPA changed the language of the proposed version of the rule, which said states could object to a project-related activity “as a whole” that could affect water quality. The final version says states can object only on the basis of water quality concerns, removing the phrase “as a whole.”

“People are going to be watching for the application of the water quality-related language,” said Laura Williams, an associate at Morgan, Lewis & Bockius LLP in Houston.

But the change doesn’t have much effect because the agency said in the rule that the dropped phrase doesn’t alter the “substance” of the provision, Porter said.

“What EPA says is both factually true and substantively irrelevant,” he said.

Among the rule’s other provisions likely to be challenged in court is its allowance for states and tribes to veto a project based on the possibility that a project may violate state or tribal law, not just the federal Clean Water Act, Porter said.

“In other words, EPA is staying that a State or Tribe can effectively prohibit an activity under the Federal Clean Water Act that the Federal Government could not prohibit,” Porter said.

“Based on what Justice Alito had to say in Sackett v. EPA about Congress’ intent in passing the Clean Water Act, I think it likely that the Sackett majority is going to have trouble with EPA’s suggestion that the Clean Water Act allows this exercise of ‘cooperative federalism,’” Porter said.

The high court may also cast a dim view on the rule’s provision allowing for states to veto a project based on “potential” water pollution because the term isn’t defined and means different things to different people, Porter said.

Fossil Fuel Objections Barred

But Pat Parenteau, emeritus law professor at Vermont Law School, said the EPA mostly just restored the law to its pre-Trump form.

“All projects large or small (note that the geographic scope of this term has been dramatically shrunk by Sackett) are subject to 401 certification by states and tribes,” Parenteau said.

“The rule does clarify that only water quality impacts are covered,” he said. “This means that climate change impacts of fossil fuels projects like pipelines cannot be considered by states and tribes when considering whether to certify or condition the federal license or permit required for construction.”

EPA struck a “fair balance” between expediting project permitting and respecting state authority to protect their water quality, Parenteau said.