Water Everywhere, and Nary a Drop to Regulate

(This newsletter provides insight on the Supreme Court’s recent Clean Water Act decision in Sackett v. EPA, in which Briscoe Ivester & Bazel LLP partner Tony Francois served as co-counsel for the Sacketts at the Supreme Court)

It has been a tumultuous few months for Clean Water Act practice.

Earlier this year, the Biden Administration issued a new regulation defining “navigable waters” (or “waters of the United States” if you will) under that Act. This 2023 Rule rescinded the definition adopted in 2020 by the Trump Administration, and re-established federal Clean Water Act regulation of a number of types of water features left out of the 2020 Rule. This chart shows the key differences between the two rules. Notably, however, the 2023 Rule did not restore the full breadth of regulation historically claimed by EPA and the U.S. Army under their 1980s vintage regulations and subsequent guidance. The 2023 Rule abandoned the agencies’ claim to regulate to the outer limits of federal Commerce Clause power. Instead, the 2023 Rule hews to the limits expressed in the 2006 Rapanos decision, in the plurality opinion and Justice Kennedy’s concurring opinion. This chart shows the differences between the 2023 Rule and the older regulations.

So the structure of the 2023 Rule is really the twin concepts in the Rapanos opinions of (1) relatively permanent and continuously flowing water bodies (the plurality) and (2) significant nexus (the Kennedy test). This chart shows the 2023 rule broken down by categories. Wetlands and non-navigable tributaries are regulated under this Rule if they satisfy either test.

Since the 2023 Rule was published, several federal courts (including one, well, supremely important one) have had their say about it, and their opinions are not favorable. In three cases brought by business trade associations and state Attorneys General, federal courts have enjoined the 2023 Rule in 26 states. This map shows the scope of each injunction, as well as the states where the 2023 Rule remains in full effect.

Then, last week, the Supreme Court of the United States decided Sackett v. EPA, a long running dispute over the scope of Clean Water Act authority over adjacent wetlands (in which your humble author was lead counsel for the Sacketts for several years, and co-counsel at the Supreme Court). In Sackett, the Supreme Court unanimously rejected the significant nexus test from Justice Kennedy’s lone concurring opinion in Rapanos. And a majority of the Court adopted the Rapanos plurality’s test for adjacent wetlands: only those wetlands with a continuous surface connection to other regulated waters, such that the two are indistinguishable. The majority explicitly rejected the idea that wetlands separated from other regulated waters by berms, dunes, levees, and the like are subject to Clean Water Act authority.

The result of the Sackett decision for the 2023 Rule is not entirely clear, but this much is certain. The portion of the rule that regulates wetlands solely on the basis of the significant nexus test, 33 C.F.R. § 328.3(a)(4)(iii), would appear to be invalid as a matter of law. And the decades old definition of “adjacent,” 33 C.F.R. § 328.3(c)(2), is also toast. From “Adjacent means bordering, contiguous, or neighboring. Wetlands separated from other waters of the United States by man-made dikes or barriers, natural river berms, beach dunes, and the like are “adjacent wetlands[,]” the only text to survive Sackett is “Adjacent means … contiguous.”

A question remains about the 2023 Rule’s use of the significant nexus concept to define regulated tributaries and lakes and ponds. See 33 C.F.R. § 328.3(a)(3)(ii), id. at § 328.3(a)(5)(ii). The Sackett case was decided on the Court’s conclusions that the significant nexus test is not a valid interpretation of the Clean Water Act, and the majority’s conclusion that the property in question was not adjacent to any other water as a mater of law. Sackett does not address how widely the Clean Water Act regulates non-navigable tributaries, or the Rapanos plurality’s discussion of that topic. From that perspective, the 2023 Rule’s inclusion of tributaries, lakes, and ponds, solely using the significant nexus concept may survive Sackett.

On the other hand, there was always some controversy over the agencies’ use of significant nexus to regulate non-navigable tributaries, since Justice Kennedy’s Rapanos concurrence does not do so. And for their entire history of guidance and regulations implementing significant nexus, from the initial post-Rapanos guidance in 2007 through the 2023 Rule, the agencies have relied on the Kennedy concurrence as the basis for the concept. Now the Supreme Court has unanimously repudiated significant nexus as an invalid interpretation of the Clean Water Act. From this perspective, the 2023 Rule’s provisions regulating tributaries, lakes, and ponds solely on significant nexus are in jeopardy, as is the expansive definition of “significantly affect,” 33 C.F.R. § 328.3(c)(6), that the 2023 Rule uses to implement significant nexus.

This chart shows the provisions of the 2023 Rule which Sackett undermines, with “certainly illegal” ones in red and “now dubious” ones in yellow.

With Sackett decided and these questions now in view, the Army announced on Tuesday, May 30, that it is suspending further processing of Approved Jurisdictional Determinations until it “figures out what is going on,” as the kids say these days.

Property owners and practitioners should look for EPA and the Army to first issue guidance and then new regulations to bring the existing definition into compliance with Sackett. And there is probably more play in the joints of “continuous surface connection” than most observers would assume, given that phrase is now the only legal basis on which the agencies can regulate wetlands.

Tony Francois
235 Montgomery Street, Suite 935
San Francisco, CA 94104
Telephone: (415) 402-2700