On January 18, 2023, the EPA and Army Corps of Engineers (Army Corps) published a new final rule revising the definition of “waters of the United States” (the Rule) found in regulations implementing the Clean Water Act (CWA or the Act). The new Rule will become effective on March 20, 2023 (pending the outcomes of the litigations discussed below).

The new Rule defines “waters of the United States” (WOTUS) found at 33 CFR 328.3 and 40 CFR 120.2 as:

• Traditional navigable waters, the territorial seas, and interstate waters, which the Rule calls “paragraph (a)(1) waters”;
• Impoundments of waters otherwise defined as WOTUS, designated as “paragraph (a)(2) impoundments”;
• “Jurisdictional tributaries” to paragraph (a)(1) waters where the tributaries meet either the “relatively permanent standard” or “significant nexus standard”;
• “Jurisdictional adjacent wetlands,” which include wetlands adjacent to paragraph (a)(1) waters without the need for any further inquiry and wetlands that are adjacent to other types of waters and meet either the relatively permanent standard or the significant nexus standard; and
• Intrastate lakes and ponds, streams, or wetlands not identified above that meet either the relatively permanent standard or the significant nexus standard, designated as “paragraph (a)(5) waters.”

For purposes of characterizing a “jurisdictional adjacent wetland” under the new Rule, a wetland will be deemed “adjacent” to WOTUS if any of the following three criteria are satisfied:

• The wetland has an unbroken surface or shallow subsurface connection to WOTUS;
• The wetland is physically separated from WOTUS by man-made dikes or barriers, natural river berms, and the like; or
• The wetland is reasonably proximate to WOTUS such that the wetland has significant effects on water quality and the aquatic ecosystem of WOTUS.

But a wetland, even if “adjacent,” must satisfy either the “relatively permanent” standard or the “significant nexus” standard to be considered WOTUS.

Under the relatively permanent standard, an adjacent wetland must be “relatively permanent, standing or continuously flowing” and have a “continuous surface connection” to either a paragraph (a)(1) water or to a jurisdictional tributary or impoundment that is itself relatively permanent. The “continuous surface connection” is a “physical-connection requirement” that the adjacent wetland physically abuts or touches WOTUS, including through artificial structures.

The “significant nexus standard” applies to those adjacent wetlands that lack a continuous surface connection to a jurisdictional tributary or impoundment that is itself relatively permanent, and to wetlands that are adjacent to a non-relatively permanent tributary or impoundment. The significant nexus standard assesses whether the adjacent wetland, “either alone or in combination with other similarly situated waters in the region, significantly affects the chemical, physical, or biological integrity” of a paragraph (a)(1) water; this analysis focuses on the wetland’s impacts on the paragraph (a)(1) waters instead of on any intermediate tributary. The agencies will consider “all tributaries and their adjacent wetlands within the catchment area of the tributary of interest” as part of this analysis, considering factors such as:

• Distance from the paragraph (a)(1) water;
• Hydrologic conditions (such as frequency, duration, magnitude, timing and rate of hydrologic connections, including shallow subsurface flow);
• Size, density, or number of waters that have been determined by the agencies to be similarly situated;
• Landscape position and geomorphology; and
• Climatological variables (such as temperature, rainfall and snowpack).

A Brief History of Defining WOTUS

The history of the EPA and Army Corps’ efforts to define WOTUS over the past several decades sheds some light on the differences between the new Rule and the prior regulatory regimes.

In 1986, the agencies promulgated historic regulations (the 1986 Regulations), which, in summary, defined WOTUS to mean traditional navigable waters, the territorial seas, interstate waters, and intrastate waters whose use or degradation could affect interstate or foreign commence—as well as tributaries of and wetlands adjacent to any of those waters.

The 1986 Regulations had been in effect for four decades when, in 2006, the Supreme Court issued its seminal decision in Rapanos v. United States. Justice Scalia narrowly interpreted the statutory term “waters of the United States” in a four-Justice plurality opinion, holding that CWA jurisdiction extended over only “relatively permanent, standing or continuously flowing bodies of water” that are connected to traditional navigable waters, plus wetlands with a “continuous surface connection” to such relatively permanent water bodies. Justice Kennedy wrote separately, concurring with the Court’s judgment with respect to the facts of the case, but he interpreted “waters of the United States” to include wetlands that “possess a ‘significant nexus’ to waters that are or were navigable in fact or that could reasonably be so made.” The Supreme Court’s split decision and lack of a commanding majority opinion in Rapanos was received by the EPA, Army Corps, and regulated community with much confusion.

In 2008, the EPA and Army Corps issued a non-binding regulatory guidance document (the 2008 Rapanos Guidance) addressing common questions about federal jurisdiction over WOTUS and clarifying the two jurisdictional standards from Rapanos. In the Guidance, the EPA and Army Corps concluded that federal jurisdiction existed over certain waterbodies that meet either the “relatively permanent” standard from Justice Scalia’s plurality opinion or Justice Kennedy’s “significant nexus” standard. Consistent with Justice Scalia’s plurality opinion, the agencies asserted categorical CWA jurisdiction over traditional navigable waters, wetlands adjacent to traditional navigable waters, relatively permanent tributaries of traditional navigable waters with typically year-round or at least seasonal flow, and wetlands that abut such tributaries.  The agencies also asserted case-by-case jurisdiction over non-navigable tributaries that are not relatively permanent; wetlands adjacent to non-navigable tributaries that are not relatively permanent; and wetlands adjacent to, but not directly abutting, relatively permanent, non-navigable tributaries under Justice Kennedy’s significant nexus standard.

The 1986 Regulations as interpreted by the 2008 Rapanos Guidance were later replaced by the 2015 Clean Water Rule. The agencies sought to simplify the post-Rapanos jurisdictional landscape by replacing the numerous categories of waterbodies found in the 1986 Regulations with three broader categories: waters that are categorically “jurisdictional by rule” without the need for further analysis; waters that are subject to case-specific jurisdictional analysis; and waters that are categorically excluded from jurisdiction.

The 2015 Clean Water Rule emphasized Justice Kennedy’s significant nexus standard over Justice Scalia’s relatively permanent standard to include additional types of waters in the new “jurisdictional by rule” category. Traditional navigable waters, the territorial seas, interstate waters, tributaries of these waters, and wetlands adjacent to these waters were all deemed “jurisdictional by rule.” The practical effect of the 2015 Clean Water Rule was a categorical expansion in federal jurisdiction over waterbodies that might have been excluded from the definition of WOTUS on a case-by-case basis under the 1986 Regulations and Rapanos.

In 2019, following a presidential election and change in administration, the agencies repealed the 2015 Clean Water Rule and re-codified the 1986 Regulations without any changes to the regulatory text. The 1986 Regulations were once again implemented pursuant to the 2008 Rapanos Guidance until 2020, when the EPA and Army Corps promulgated the 2020 Navigable Waters Protection Rule to replace them.

In an apparent about-face, the 2020 Navigable Waters Protection Rule emphasized Justice Scalia’s relatively permanent standard over Justice Kennedy’s significant nexus standard. The 2020 Navigable Waters Protection Rule established four categories of WOTUS: traditional navigable waters and the territorial seas; tributaries of traditional navigable waters and the territorial seas; certain lakes, ponds, and impoundments of WOTUS; and wetlands adjacent to other WOTUS (other than jurisdictional wetlands).

The 2020 Navigable Waters Protection Rule defined “adjacent wetlands” to include wetlands that abut WOTUS. In addition, the agencies asserted CWA jurisdiction over wetlands that did not abut WOTUS but were “inundated by flowing” from WOTUS in a typical year, physically separated from WOTUS by certain natural features, or physically separated from WOTUS by an artificial structure that “allows for a direct hydrologic surface connection” in a typical year. Wetlands lacking these specific types of connections to WOTUS were categorically deemed to be non-jurisdictional. The practical effect of the 2020 Navigable Waters Protection Rule was to limit federal jurisdiction over certain wetlands and other waters that would have been deemed jurisdictional under the 1986 Regulations, the 2008 Rapanos Guidance, and/or the 2015 Clean Water Rule.

Following another election and change in administration, the agencies announced their intent to revisit the regulatory definition of WOTUS by revising or replacing the 2020 Navigable Waters Protection Rule in June 2021. The 2020 Navigable Waters Protection Rule was subsequently vacated by the Arizona district court in August 2021, bringing the 1986 Regulations temporarily back into effect until the new WOTUS Rule becomes effective on March 20, 2023 (pending the outcomes of the litigations discussed below).

Challenges to the New WOTUS Rule and Its Future Outlook

As of the date of this blog post, there are at least five litigations challenging the new WOTUS Rule.

Two of these cases, State of Texas v. U.S. Environmental Protection Agency and American Farm Bureau Federation v. U.S. Environmental Protection Agency, were filed on January 18, 2023 (and subsequently consolidated) in the District Court for the Southern District of Texas. The third challenge to the WOTUS Rule, State of West Virginia v. U.S. Environmental Protection Agency, was filed in the District Court for the District of North Dakota on February 16, 2023, by a 24-State coalition led by primarily Republican attorneys general. The fourth and fifth challenges, Commonwealth of Kentucky v. U.S. Environmental Protection Agency and Kentucky Chamber of Commerce v. U.S. Environmental Protection Agency, were both filed on February 22, 2023 (and subsequently consolidated) in the District Court for the Eastern District of Kentucky.

These complaints allege similar claims, including that the new WOTUS Rule was promulgated without adhering to the requisite procedures, is arbitrary and capricious and in exceedance of the agencies’ statutory authority, and violates the resurgent “Major Questions” doctrine. The challengers also claim that the new Rule unconstitutionally violates the Commerce Clause of the First Amendment and the Due Process Clause of the Fifth Amendment, and that the Rule infringes upon the States’ sovereignty and authority to regulate intrastate waters in violation of the Tenth Amendment. The challengers request declaratory and injunctive relief, including vacatur of the WOTUS Rule.

Each of the challengers also moved for a preliminary injunction of the WOTUS Rule, seeking to enjoin implementation of the Rule until the merits of their cases can be resolved. The State of Texas and industry challengers filed their preliminary injunction motions in the Southern District of Texas litigation on February 7, 2023, and the District Court scheduled a hearing on the preliminary injunction motions for March 15, 2023, before the Rule goes into effect on March 20, 2023. The multi-State coalition moved for a preliminary injunction on February 21, 2023, to which the defendant agencies must respond by March 14, 2023. And last, the Kentucky plaintiffs filed their motions on February 22, 2023, and oral arguments were heard by the District Court on March 10, 2023; the Court is expected to imminently issue its decision on the Kentucky preliminary injunction motion.

Meanwhile, the Supreme Court is preparing to re-visit its interpretation of the statutory definition of WOTUS in Sackett v. Environmental Protection Agency. In Sackett, an Idaho couple sought to construct a house on a “soggy” undeveloped lot near a large lake, which is undisputedly a traditional navigable water. EPA issued a stop-work order asserting that the Sacketts’ property contains federally jurisdictional wetlands. The Sacketts disagreed with EPA’s assertion of CWA jurisdiction over their property and commenced a prolonged litigation in 2008.

After years resolving a threshold procedural matter, including an initial appearance at the Supreme Court in 2012 which remanded the case to be heard on the merits, the District Court for the District of Idaho issued a substantive ruling in favor of the EPA in 2019. The District Court applied the significant nexus standard and found that the Sackett’s property contained federally jurisdictional wetlands adjacent to the lake.

On appeal to the Ninth Circuit Court of Appeals, the Sacketts argued that only the relatively permanent test should be applied, not the significant nexus test. The Court of Appeals disagreed, stating that Justice Kennedy’s significant nexus standard is the controlling law in the Ninth Circuit, and after applying that standard, the appellate court also concluded that the Sackett’s property contained federally jurisdictional wetlands.

The Sacketts appealed to the Supreme Court, which granted certiorari in 2021. The Supreme Court heard oral arguments on October 3, 2022, at the start of the current term. The Deputy Solicitor General appearing on behalf of the agencies told the Court that the agencies were preparing to release the new WOTUS Rule by the end of 2022 – perhaps in part to strengthen the agency’s position ahead of the Court’s decision. A decision in Sackett is expected to be issued by late June or early July, and it may upend the new WOTUS Rule by prohibiting the use of the significant nexus standard either in whole or in part.

The SPR Blog will continue to provide updates and analysis of significant developments in these litigations and the implementation of the new WOTUS Rule.