In a long-anticipated decision on the reach of the Clean Water Act (“CWA”), the Supreme Court significantly narrowed the scope of the wetlands and other waters subject to the CWA’s protections. The Court’s opinion in Sackett v. Environmental Protection Agency, released May 25, 2023, limits waters of the United States (“WOTUS”) to “relatively permanent” water bodies such as streams, oceans, rivers and lakes, and to wetlands with a “continuous surface connection” to those water bodies. The Court’s holding removes a wide swath of previously-protected wetlands from the CWA’s permitting requirements, likely eliminates jurisdiction for many ephemeral and intermittent streams, and spells all but certain doom for the U.S. Army Corps of Engineers and U.S. Environmental Protection Agency’s recent rulemaking adopting a new definition of WOTUS for CWA purposes.
This Sackett decision is the second challenge to the EPA’s assertion that wetlands on a residential lot near Priest Lake, Idaho, were subject to CWA jurisdiction to reach the Supreme Court. The first case involved a procedural matter, and the Supreme Court held that property owners are entitled to immediate judicial review of EPA compliance orders and need not wait for the agency to bring a judicial enforcement action in order to contest the assertion that their property contains “waters of the United States” subject to CWA jurisdiction. On remand, the EPA asserted jurisdiction over the wetlands because they were “adjacent” to a creek and had a “significant nexus” through the creek to the lake, a traditional navigable water. The district court and the Ninth Circuit Court of Appeals upheld the EPA’s position, and the Supreme Court granted certiorari. Although the Sacketts’ challenge arose under an earlier regulatory definition of WOTUS, the issues remain relevant to the current WOTUS definition, which relies on a broad definition of “adjacent” and incorporates the “significant nexus” test for certain wetlands, tributaries, and other waters.
“Relatively Permanent” Water Bodies and “Continuous Surface Connections”
The Supreme Court reversed, unanimously rejecting the “significant nexus” test as a basis for CWA jurisdiction. The majority also rejected the EPA’s broad interpretation of “adjacent” as including not just wetlands that were physically touching a traditional navigable water, but also those neighboring or nearby to such waters.
Justice Samuel Alito, writing for a five-person majority, held that WOTUS include only: (i) relatively permanent, standing or continuously flowing bodies of water forming geographic features described in ordinary parlance as streams, oceans, rivers and lakes; and (ii) adjacent wetlands with a continuous surface connection to such waters, so that the wetlands are “as a practical matter indistinguishable from” the water bodies. Thus, to prove jurisdiction over a wetland, the government must now show that the adjacent body of water constitutes WOTUS (i.e., is a “relatively permanent body of water connected to interstate navigable waters”); and that the wetland has a “continuous surface connection” with that water, making it difficult to determine where the “water” ends and the “wetland” begins.
The “relatively permanent” standard and the requirement of a “continuous surface connection” for adjacent wetlands echo the key elements of Justice Antonin Scalia’s plurality opinion in the 2007 case Rapanos v. United States, 547 U.S. 715 — a fractured decision in which no opinion gathered the support of a majority of the Court. The Sackett opinion explicitly rejects the “significant nexus” test that originated in Justice Anthony Kennedy’s concurring opinion in Rapanos, and which the Army Corps and EPA have interpreted as conferring jurisdiction over many wetlands not physically contiguous with a traditional navigable water, as well as many ephemeral and intermittent tributaries that are not themselves navigable, if they have a significant nexus with a traditional navigable water. For most of the 16 years since the Rapanos decision, the agencies have asserted jurisdiction over waters meeting either Justice Scalia’s relatively permanent standard or Justice Kennedy’s significant nexus standard. The Sackett Court’s rejection of the significant nexus standard is thus important not only because it limits the scope of jurisdictional wetlands, but also because it appears to preclude jurisdiction over most ephemeral streams and perhaps many intermittent streams, both of which are common, especially in the arid West.
Implications for the Current WOTUS Rule
In January 2023, the EPA published a final rule adopting a new definition of WOTUS for CWA purposes. That rule defines WOTUS to include, among other things, traditional navigable waters, and tributaries, adjacent wetlands, and other waters that are not themselves navigable but meet either the “relatively permanent” test or the “significant nexus” test. The rule also includes a broad definition of “adjacent,” which it defines to mean “bordering, contiguous or neighboring,” and allows for adjacency of wetlands separated from WOTUS and by man-made or natural barriers. Although the rule was adopted while Sackett was pending, and thus was not directly challenged in the case, it largely mirrors the EPA’s position challenged in Sackett, and the Sackett majority explicitly criticized the final rule as overbroad.
A total of 27 states, as well as various industry and trade groups, have challenged the 2023 final rule in cases that were filed in three federal district courts before the Court decided Sackett. The Sackett opinion validates key arguments made in those cases and thus appears to doom the government’s efforts to defend the rule. Although none of the district courts have yet issued a final decision, the most likely outcome appears to be vacatur of the rule and the eventual adoption of a new regulatory definition. In the interim, the Army Corps and EPA could issue guidance interpreting and applying the Sackett decision, as they did following the Rapanos decision. Although the timing and process for the agency response to Sackett are unclear,one thing is certain: the scope of WOTUS has been reduced.
Implications for Other CWA Programs
Sackett involved a challenge to federal jurisdiction under the CWA Section 404 permitting program, which regulates discharges of dredged and fill materials into WOTUS. However, WOTUS also defines the reach of other water quality programs under the CWA, including the National Pollutant Discharge Elimination System (“NPDES”) (Section 402), which regulates wastewater, stormwater, and other types of discharges to WOTUS. Following Sackett, discharges to some waters will no longer require an NPDES permit, although those discharges, like the discharge of fill material, may still be regulated under state law. In states such as California, which already regulates all WOTUS as well as additional “waters of the state” under state law, the decision may result in some discharges requiring waste discharge requirements issued under state law rather than receiving state approval through water quality certification issued under Clean Water Act Section 401.
Anticipate Disorder and Delay
Many commenters have already described the Sackett decision as reducing uncertainty about what waters are subject to federal regulation. In the short term, however, the fallout from Sackett is likely to create regulatory uncertainty and temporary gridlock as the lower courts apply the decision to the 2023 rule and the Army Corps and EPA reevaluate the scope of their jurisdiction. Because Sackett focused on wetlands, it leaves open questions about the status of other types of waters, such as when or whether an intermittent stream can be “relatively permanent.” Unless and until the agencies issue guidance or adopt new regulations implementing the Sackett decision, uncertainty about the status of some waters will remain. The agencies may delay processing of jurisdictional determinations and permit applications for some projects. Project proponents also may have questions about the status of existing jurisdictional determinations and the need for a CWA permit going forward. The need for a federal permit, in turn, can also impact the need for related federal processes, such as Endangered Species Act consultation and National Historic Preservation Act compliance. Project proponents will need to stay nimble and plan for contingencies, at least in the short term, in order to navigate these uncertainties successfully.