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March 8, 2017

What’s Next for “Waters of the U.S.” (WOTUS)?

Bergeson & Campbell, P.C.

President Trump’s February 28, 2017, Executive Order (E.O.) directing the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) to rescind and replace the Clean Water Rule (CWR) is the latest development in the attempt to resolve the long-standing question of which surface waters and wetlands may be federally regulated and subjected to permitting under the Clean Water Act (CWA). In the decade since the U.S. Supreme Court issued its fractured opinion in Rapanos v. United States, 547 U.S. 715 (2006), EPA and the Corps have made three attempts to formally interpret Rapanos and add clarity to the WOTUS definition. Trump’s E.O. includes specific instruction to EPA and the Corps to consider interpreting “navigable waters” in a manner consistent with the late Justice Antonin Scalia’s opinion authored on behalf of the plurality in Rapanos. The CWR applied more weight to Justice Anthony Kennedy’s concurrence than Scalia’s opinion, and Kennedy’s case-by-case “significant nexus” analysis, based on ecological and hydrological functions, is incorporated in several provisions of the final rule.

Issued in final in June 2015, the CWR was immediately met with legal challenges brought by environmental groups, industry and agriculture stakeholders, and thirty-one states. State and industry opponents argue that the rulemaking process violates the Administrative Procedure Act (APA), fails to follow Rapanos, and disregards the CWA’s cooperative federalism principles. Since October 2015, implementation of the CWR has been stayed nationwide pending the outcome of the litigation in the U.S. Court of Appeals for the Sixth Circuit. The Sixth Circuit recently paused the merits proceedings due to the Supreme Court’s decision to review its ruling on the threshold venue issue. CWA Section 509(b) sets forth seven categories of agency actions for which original jurisdiction to review the action resides with the U.S. Circuit Courts of Appeal. The parties to the CWR litigation disagree as to whether the rule fits under any of the seven categories, and the Supreme Court has agreed to review the Sixth Circuit’s ruling that it has jurisdiction under Section 509(b) to review the final rule.

On March 6, 2017, EPA and the Corps published a formal Notice of Intent to Review and Rescind or Revise the Clean Water Rule in the Federal Register. 82 Fed. Reg. 12532. At this early stage, it is unclear if EPA/the Corps will combine the rescission and proposal of a revised rule in the same rulemaking, or bifurcate these actions into separate rulemakings. Under the APA, the rescission of a final rule is subject to the public notice-and-comment process. However the next steps take shape, EPA and the Corps are likely to rework the more controversial CWR concepts, including the rule’s definitions for adjacency and tributary, exclusions for ditches, and inclusion of streams with intermittent and ephemeral flow. The rule revision is also likely to address a key question in the WOTUS debate: what role, if any, should the “significant nexus” test from Kennedy’s concurring opinion in Rapanos serve in defining jurisdictional waters? Kennedy cites examples of hydrological and ecological functions that alone or in combination could establish a “significant nexus” with other jurisdictional waters, including sediment trapping and nutrient cycling, and the contribution of flow to downstream waters. In contrast, Scalia interprets adjacency to require a physical, surface water connection between the wetland at issue and a navigable water.

The following chart provides a summary and comparison of some of the key concepts and provisions within the CWR, with Scalia and Kennedy’s opinions in Rapanos:

Concept and/or Definition2015 Clean Water RuleJustice Scalia’s Opinion in RapanosJustice Kennedy’s Concurring Opinion in Rapanos
Ephemeral or Intermittent StreamsMay meet the definition of WOTUS if they are a tributary of a jurisdictional water; The CWR defines “tributary” in the context of WOTUS for the first time.A “tributary” is defined as a water possessing the physical characteristics of bed and banks and ordinary high water mark (OHWM), that contributes flow to a jurisdictional water.Based on the CWR’s definition, a tributary includes perennial, intermittent, and ephemeral streams and those streams with “flowing water only in response to a precipitation event in a typical year.”Excluded from WOTUS based on plain language of the statute.Scalia states in the plurality opinion that the CWA “includes only those relatively permanent, standing or continuously flowing bodies of water …”and that “channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall” are excluded from WOTUS based on the plain language of the CWA.May meet the definition if it possesses a “significant nexus” to a jurisdictional water.Kennedy contends that the plurality’s interpretation contradicts the spirit of the CWA, stating that requiring “permanent standing water or continuous flow, at least for a period of ‘some months,’ — makes little practical sense in a statue concerned with downstream water quality. The merest trickle, if continuous, would count as a ‘water’ subject to federal regulation, while torrents thundering at regular intervals through otherwise dry channels would not.” (citation omitted). Kennedy gives the example of the Los Angeles River that often “looks more like a dry roadway,” but periodically contains high volume, fast-flowing water.
Adjacent Wetlands/Waters Category of Jurisdictional WatersDefines and sets distance parameters for “adjacent.”The CWR added a definition of “neighboring” for purposes of adjacency to mean: wetlands/ waters that are within 100 feet of the OHWM, 1,500 feet of the high tide line, or within the 100-year floodplain to a maximum distance of 1,500 feet beyond the OHWM.Adjacent Wetlands/ Waters possess a continuous, surface water connection to other jurisdictional waters.Wetlands that directly abut a jurisdictional water or those with a significant nexus are considered “adjacent.”Kennedy argues that the plurality’s continuous, surface-water connection requirement would foreclose jurisdiction over wetlands that directly abut a navigable-in-fact water while permitting CWA authority to extend to “wetlands (however remote) possessing a surface-water connection with a continuously flowing stream (however small).”
Background: Prior to the CWR, the definition of WOTUS included a category of adjacent wetlands and waters defined as “Wetlands adjacent to waters (other than waters that are themselves wetlands) identified in paragraphs (a)(1) through (G)” (i.e., traditional navigable waters, interstate waters, the territorial seas, impoundments and tributaries of the aforementioned waters). “Adjacent” was defined as: 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.” (emphasis added).The meaning of adjacency was a central issue before the Court in Rapanos.
Ditch ExclusionsThe CWR added an exclusion for the following ditches in the WOTUS definition: 1) ditches with ephemeral or intermittent flow that are not a relocated tributary, excavated in a tributary, or drain wetlands; and 2) ditches that do not flow, either directly or through another water, into a traditional navigable water, interstate waters, and territorial seas.• Some opponents assert that this exclusion tied to the historical presence of tributaries creates more confusion than clarity, and erodes the CWA’s exemption for agricultural activities.The ditch exclusion arose post-Rapanos.The joint brief for the states challenging the CWR asserts that CWA authority over ditches that possess ephemeral or intermittent flow that are relocated tributaries or are excavated in relocated tributaries violates Scalia’s test that excludes intermittent or ephemeral streams.The ditch exclusion arose post-Rapanos.The joint brief for the states challenging the CWR asserts that CWA authority over ditches that possess ephemeral or intermittent flow that are relocated tributaries or are excavated in relocated tributaries goes beyond the scope of Kennedy’s WOTUS interpretation which states that “regulation of drains, ditches, and streams remote from any navigable-in-fact water and carrying only minor water volumes toward it” is not authorized by the CWA.
Background: Prior to the CWR, the WOTUS definition did not include a specific exclusion for ditches. The CWA, however, explicitly exempts agricultural activities from CWA permitting, including stormwater discharges, maintenance of drainage ditches, and construction/maintenance of drainage ditches on dry land.

At this time, there is no clear consensus on how EPA and the Corps should best resolve the ambiguities of the WOTUS definition. There is some confusion as to whether the E.O. calls for strictly favoring Scalia’s reading of WOTUS and disregarding Kennedy’s “significant nexus” test entirely. Some practitioners see the E.O. instruction as merely signaling a shift towards Scalia’s more narrow construction. There is arguably some merit in Kennedy’s argument that Scalia’s surface connection and continuous flow requirements would still leave room for a remote wetland or water to be considered jurisdictional regardless of its influence on the water quality of jurisdictional waters downstream. One approach that some CWR opponents favor is a two-step, hybrid of the Scalia and Kennedy tests that would first identify waters with surface water connections and relatively permanent, continuous flow, and then perform a “significant nexus” analysis. The case-by-case nature of the “significant nexus” test does not solve the issue of regulatory certainty, and also can slow down the permitting process (particularly for wetlands), as it may require verification in the field and technical expertise.

The outcome of the forthcoming rulemaking will dictate which waters are subjected to the CWA’s discharge (Section 402) and wetland dredge-and-fill (Section 404) permitting schemes. Forty-six states currently have delegated authority to administer the 402 program, and the vast majority define “waters of the state” more broadly than WOTUS, and regulate beyond the federal requirements. Only two states (New Jersey and Michigan) currently administer the Section 404 programs in their states. Unlike state laws, the CWA attaches a citizen suit provision, which empowers environmental advocates to seek judicial enforcement of CWA requirements where they find federal and state enforcement lacking. A future revision to WOTUS is unlikely to bring sweeping changes for the regulated community in the wet states of the northeast and southeastern U.S., but has much greater implications for the states in the arid west, which are dominated by ephemeral and intermittent streams.

For agricultural lands throughout the U.S., the perceived expansion of the scope of WOTUS under the CWR has created uncertainty around the regulation of ditches and wetlands. Currently, pesticide applications into, over, or near WOTUS are regulated under the Section 402 program. For pesticide applicators it can be difficult to discern if a particular dry ditch may intermittently contain flowing water that brings it within the scope of WOTUS.

The timeline for the revised rulemaking is uncertain, but it will likely be at least early 2018 before EPA and the Corps would issue a final revised rule, which is sure to be judicially challenged. Industry and agricultural stakeholders should review and submit comments on the future proposal, which may be published as early as summer 2017. The pending Supreme Court review and decision on the appropriate venue for such a challenge could expedite the litigation of the future rule. Barring any interim guidance, EPA and the Corps are continuing to follow concepts in the 2008 guidance document interpreting Rapanos, which also incorporates Kennedy’s “significant nexus” test. Although the agencies are expected to curtail enforcement of all environmental statutes, environmental groups are expected to push back with increased litigation to enforce the CWA.