Narrowing the Jurisdictional Channel: What the President's Executive Order on the Waters of the United States Rule Means for the Scope of Federal Jurisdiction under the Clean Water Act
On February 28, 2017, President Donald Trump signed an Executive Order titled Restoring the Rule of Law, Federalism, and Economic Growth by reviewing the "Waters of the United States" Rule, targeting the controversial 2015 Army Corps of Engineers' rule, 80 Fed. Reg. 37054 (June 29, 2015), that clarified the scope of federal jurisdiction under the Clean Water Act. This Client Alert provides some background on federal jurisdiction under the Clean Water Act, summarizes the Executive Order, and discusses the effect of the Order in the context of current law.
Background on Federal Jurisdiction under the Clean Water Act
The Clean Water Act (CWA) regulates discharges to "navigable waters," defined as "waters of the United States." Regulations in place since 1975 have defined "waters of the United States" to include "not only actually navigable waters but also . . . all 'freshwater wetlands' that [are] adjacent to the other covered waters." See United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 123-24 (1985).
While there is consensus that some non-navigable waters are within federal jurisdiction, the exact scope of federal jurisdiction over non-navigable waters has long been uncertain. In 2006, the United States Supreme Court considered the scope of federal jurisdiction over non-navigable waters in Rapanos v. United States, 547 U.S. 715, 729 (2006). While a majority of the Court found jurisdiction lacking, the Court's fractured decision failed to establish a definitive jurisdictional rule. Justice Scalia authored the plurality opinion, which asserted that federal jurisdiction existed only over "relatively permanent, standing or flowing bodies of water" and "only those wetlands with a continuous surface connection to" waters of the United States. Id. at 739-42. Justice Kennedy wrote separately to articulate a broader rule allowing federal jurisdiction over wetlands with a "significant nexus" to navigable waters. Id. at 759.
Most circuits either follow Justice Kennedy's significant nexus test, or find it to be at least as controlling as Justice Scalia's plurality opinion. The United States Army Corps of Engineers (the Corps) and the Environmental Protection Agency (EPA), the federal agencies responsible for administering the CWA, have adopted Justice Kennedy's significant nexus test through a series of guidance documents. But the significant nexus test and the Rapanos decision generally have proved difficult to apply consistently. For a more detailed discussion of the "significant nexus" test see "Forget About the Clean Water Rule: What You Need to Know Today about Federal Jurisdiction over Wetlands and Streams," by Gregory S. Braker, John B. Mavretich, and Margaret N. Strand, dated January 2016.
Attempting to further clarify the CWA's jurisdictional reach, the Corps issued the "Clean Water Rule: Definition of 'Waters of the United States,'" 80 Fed. Reg. 37054 (June 29, 2015) (the WOTUS Rule). In large part, the Corps modeled the WOTUS Rule on Justice Kennedy's significant nexus test. But because the WOTUS Rule took a broad view of federal jurisdiction, several industry groups and states challenged it in courts across the country. Ultimately, the Sixth Circuit granted a nationwide stay of the WOTUS Rule in October 2015. See Order of Stay, EPA v. Ohio, Nos. 15-3799/3822/3853/3887 (October 9, 2015). As a result of the stay, agencies currently follow pre-WOTUS Rule agency guidance documents and case law, which generally implement the significant nexus test. This is the landscape in which the recent Executive Order operates.
Summary of the Executive Order
The Executive Order on Restoring the Rule of Law, Federalism, and Economic Growth by reviewing the "Waters of the United States" Rule has three main components:
A national policy to keep the "navigable waters" free from pollution while "promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of the Congress and the Senate."
A requirement that the Administrator of the EPA and the Assistant Secretary of the Army for Civil Works "review" the WOTUS Rule for consistency with this policy and publish a proposed rule "rescinding or revising" the WOTUS Rule.
A requirement that in future rulemaking, the Administrator and the Assistant Secretary "consider interpreting the term 'navigable waters,' . . . in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States."
The Order also addresses ongoing litigation on the 2015 WOTUS rule. The Administrator and the Assistant Secretary are instructed to promptly notify the Attorney General of the review of the WOTUS rule pursuant to the Executive Order. The Attorney General may at his discretion inform the court and "take such measures as he deems appropriate concerning any such litigation pending the completion of further administrative proceedings related to the rule."
Impact of the Executive Order on Federal Jurisdiction under the CWA
As a result of the Executive Order, the Corps will almost certainly take a narrower approach to federal CWA jurisdiction in the future. Current law, including agency guidance now in effect, generally applies the significant nexus standard. And though the Sixth Circuit's stay is still in effect, the WOTUS Rule is also partly based on this standard (see 80 Fed. Reg. at 37056).
Under the Executive Order, the Administrator and the Assistant Secretary can either revise or rescind the WOTUS Rule and, in any future rulemaking, must consider interpreting "waters of the United States" consistent with Scalia's narrower plurality opinion in Rapanos. Thus, a new rule consistent with the Executive Order could move from the broader "significant nexus" standard to a narrower, "relatively permanent/surface water connection" jurisdictional test. Once a new rule is in place, orders and guidance implementing the new rule would replace current agency guidance. On the litigation front, the Attorney General will likely request that the courts hearing challenges to the WOTUS Rule remand the Rule back to the Corps for reconsideration.
While the Executive Order does not go so far as to mandate a new rule and technically leaves room for the agencies to rescind but not replace the WOTUS Rule, it is extremely unlikely we will see a return to the pre-WOTUS landscape, in which the significant nexus standard generally governed federal jurisdictional determinations. The Trump Administration has signaled its strong disapproval of the potentially broad sweep of the significant nexus standard and we expect interpretations from the Corps and EPA to reflect the Administration's policy. Litigation challenges to individual permit decisions will likely be frequent as the Administration narrows the channel of federal jurisdiction under the Clean Water Act.