On January 22, 2018, the Supreme Court in a unanimous decision threw the long contested issue of what constitutes “waters of the U.S.” back to the lower courts.  Somewhat surprisingly, the Supreme Court held that federal district courts have jurisdiction to hear challenges to the rule, reversing a Sixth Circuit decision and suspending that court’s nationwide stay of the rule.  In doing so, the Court guaranteed that a revised definition of “waters of the U.S.” will remain undecided for some time to come.

Historically, the federal government only regulated truly “navigable waters” under the River and Harbors Act of 1899.  That early statute was focused on interstate navigation, intending to prevent the disposal of material into waterways that could interfere with navigation.  In the 1970s, the “navigable waters” definition was retained but expanded in the new Clean Water Act (CWA) to become “waters of the U.S.,” which focused on limiting pollution to interstate waterways.  The protection of “waters of the U.S.” initially concentrated on “conventional” pollutants (solids, oxygen demand, fecal coliform, etc.), but over time it evolved to encompass chronic and acute toxicity and a long list of potential hazardous substances.  The CWA also early on defined oil pollution as both reportable and enforceable if it either created a sheen or violated state water quality standards.

EPA applied the “waters of the U.S.” definition through both Section 402 of the CWA (for point source permitting (NPDES)) and through Section 404 (wetlands protection and permitting).  Even states play a role, through Section 401 of the CWA, which requires state certification to confirm that proposed projects do not violate state water standards (and which has recently become significant for pipeline projects in particular, see prior post noting recent CWA 401 challenges).  By the 1980s, several federal agencies had developed varying definitions of wetlands, which presented the legal question of what type of wetlands qualified as waters of the U.S. EPA, Fish & Wildlife, and the Army Corps all had different approaches.  The courts were asked to interpret what the reach of the “waters” definition should be, and that question went back and forth to the Supreme Court several times (U.S. v. Riverside Bayview Homes, SWANNC v. Army COE; Rapanos v. U.S., etc.).  EPA and the Corps responded with revised regulatory definitions, but the challenges continued.

In 2015, the Obama Administration’s EPA promulgated an expansive new definition of “waters of the U.S.”  Final Rule, 90 Fed. Reg. 37,054 (June 29, 2015).  That rule was quickly challenged in various federal district and appellate courts, and the Sixth Circuit Court of Appeals stayed application of the rule nationwide.  The Supreme Court granted certiorari in early 2017 on the question of whether the courts of appeal have original jurisdictional to review challenges to the rule.  The Supreme Court’s recent decision held that the “waters of the U.S.” rule does not fall within the CWA categories of challenges for which review lies exclusively in the federal courts of appeals, sending challenges to the rule back to federal district courts.  The Justice Department notified the Sixth Circuit of the Supreme Court decision and requested that it hold the case in abeyance for the 25 day period allowed for petitions for rehearing.  The Sixth Circuit has not yet responded to that request, leaving many to question whether the rule will go into effect or whether the Administration can issue a revised rule within the next 25 days.

In July, the current Administration promulgated a new proposed rule that would rescind the 2015 final rule, pending issuance of a more substantive rulemaking that reevaluates the definition of waters of the U.S.  Congress is simultaneously considering making a statutory amendment to the definition of “waters of the U.S.” Federal Regulatory Certainty for Water Act, H.R. 1261, 115th Cong. (2017).  In response to the recent Supreme Court decision, the Trump Administration now intends to finalize a rule to revise the “applicability date” of the rule (to 2020, to allow time for the Administration to replace the rule) before the Sixth Circuit Court of Appeals can withdraw its stay of the 2015 final rule.  EPA and the Army Corps of Engineers reportedly sent a final rule late last week to the Office of Information and Regulatory Affairs for review.

Any new rulemaking is certain to be challenged by environmental groups.  Meanwhile, challenges pending in other circuit courts, such as the Tenth and Eleventh Circuit Courts of Appeal, have been sent back to district court.  While we wait for some statutory or regulatory clarity on this issue, pipeline companies seeking permits to cross waters, discharge hydrotest water, affect wetlands or for other activities having an affect on waters or wetlands, will arguably continue to be subject to the applicable law in their jurisdiction and the pre-2015 “waters of the U.S.” definition as informed by recent case law.