On June 27, 2017, the Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (USACE) released a proposed rule (Proposed Rule) that will rescind the 2015 Clean Water Rule, often referred to as the Waters of the United States (WOTUS) rule, promulgated under the administration of former President Barack Obama. The Proposed Rule is located here. In practice, the new administration’s Proposed Rule does not bring certainty to identifying waters regulated by federal law because it will reinstate the regulations in effect before the 2015 Clean Water Rule was adopted. The Proposed Rule is subject to notice and public comment before it can become final, and it will be subject to appeal.
A. Historical Context
For those less familiar with the evolution of these regulations, the historical context is important. In 1986, the EPA and USACE adopted rules defining “Waters of the United States” and the jurisdictional reach of the Clean Water Act (1986 Rules). Several Supreme Court decisions, including the often debated Rapanos v. United States plurality and concurring opinions, analyzed the 1986 Rules and the Clean Water Act’s text without providing clear direction to the agencies. Subsequent guidance, legal memorandums, and policy statements published by both the EPA and USACE further muddied the jurisdictional waters by creating a case-by-case process based upon a complex set of fact-specific factors. The state of the law left significant discretion to the agencies and uncertainty for the regulated public.
B. Procedural Context
The 2015 Clean Water Rule was issued, in part, to codify the significant nexus standard from Justice Anthony Kennedy’s concurring opinion in Rapanos. What was concerning to the regulated public, however, was the potential jurisdictional reach of the 2015 Clean Water Rule. The rule was immediately challenged in several district courts and directly to several circuit courts. On October 9, 2015, the 2015 Clean Water Rule was stayed nationwide. As a result, the 2015 Clean Water Rule never went into effect, and the 1986 Rules remained in effect pending the stay. At the same time, parties involved in cases challenging the 2015 Rule sought to dismiss those cases on the ground that the Clean Water Act does not permit circuit court review. On February 22, 2016, the Sixth Circuit held that the Clean Water Act provides for direct review in the circuit courts and the motion was denied. On January 13, 2017, the Supreme Court granted certiorari (review) on this question. The continuing effect of the Sixth Circuit’s nationwide stay depends on the outcome of the Supreme Court’s decision.
C. The Proposed Rule
On February 28, 2017, President Donald Trump executed an Executive Order directing federal agencies to rescind or revise the 2015 Clean Water Rule. (Once the 2015 Clean Water Rule is rescinded by a final rule, the Sixth Circuit’s stay is no longer necessary to delay the effective date of the rule.) To implement the Executive Order, the agencies proposed a two-step process: (1) adopt the 1986 Rules while they review the 2015 Clean Water Rule; and (2) adopt a new rule to permanently replace the 1986 Rules and 2015 Clean Water Rule. The Proposed Rule, step one, rescinds the 2015 Clean Water Rule. The next step (step two) will implement the Executive Order by crafting a rule consistent with the new administration’s policy objectives: “promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of Congress and the States under the Constitution.”
D. Regulatory Outlook
The status quo continues. The 1986 Rules have been in effect since 1986. Jurisdictional determinations will remain a quagmire of regulation, judicial decision, guidance, policy, and discretion until a new rule is promulgated in accord with the Executive Order.
In the meantime, what happens next? The Proposed Rule must comply with the Administrative Procedure Act’s process of reasoned and supportable analysis, public notice, and public comment. Undoubtedly, after it is final, litigation will follow, challenging the basis for the rule. Other similar challenges have spent years in litigation, going all the way to the Supreme Court.
The next step is a new WOTUS rule. What could a new rule look like? The Executive Order states, in very strong terms, that the agencies “shall consider interpreting the term ‘navigable waters,’ . . . in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States, 547 U.S. 715 (2006).” Justice Scalia favored bright line rules for Waters of the United States as follows: (1) relatively permanent, standing or continuously flowing bodies of water, connected to traditional navigable waters. The waters can include seasonal waters if they are relatively permanent; and (2) Wetlands with a continuous surface connection to such relatively permanent waters. This type of rule may provide greater certainty for the regulated community and reduce agency workloads.
However, the term “Waters of the United States” is provided by statute, not rule. It is likely that environmental organizations will challenge a Scalia-like rule under the Clean Water Act. To date, no court has found that Justice Scalia’s bright line rule is the sole means of determining jurisdiction under the Clean Water Act following Rapanos. In the Ninth Circuit, Justice Kennedy’s significant nexus test is currently controlling. It is not clear, at this point, how subsequent regulation will affect the Supreme Court’s interpretation of the Clean Water Act. More precisely, it may not be possible for agency regulations to constrain the jurisdictional reach of the statute. These issues, among others, will certainly keep the debate on WOTUS going for many years to come. As a result, certainty on what constitutes “Waters of the United States” continues to be elusive.