EPA and Corps Release Proposed Rule Defining "Waters of the U.S."

When does placing fill in a wetland or disturbing a stream for construction require a federal permit? Seems like this should evoke a pretty straightforward answer.  However, for more than a decade the extent of federal permitting regulations has been unclear.  Now EPA and the Army Corps of Engineers (ACOE) are attempting, once again, to try and provide a clear answer.

Background on Supreme Court Clean Water Act Decisions

Federal regulations clearly define "waters of the United States" in 40 CFR 122.2 to include "navigable waters" (i.e. those waterways used for commerce) as well as interstate waters.  What has not been clear is the scope of "other waters" that fall within federal jurisdiction.

The extent of federal jurisdiction over streams and wetlands has been unclear ever since the Supreme Court  issued its decisions in Solid Waste Authority of Northern Cook County v. Army Corps of Engineers, 531 U.S. 159 (2001) and Rapanos v. United States, 547 U.S. 715 (2006).  Since Rapanos, Justice Kennedy’s “significant nexus” test has been used to determine jurisdiction for streams and wetlands that fall into the "other water" regulatory classification.  Under the test, a waterway is evaluated to determine whether it impacts the chemical, physical, and the biological integrity of a navigable water. If it does impact a navigable water in that manner, then it falls under federal jurisdiction. 

Since the Rapanos decision, both the ACOE and EPA have struggled to provide clear guidance as to which waterways meet the "significant nexus" test.  Far too frequently, the determination has been left to case-by-case determinations that are litigated.  Making matters worse, different federal courts have reach different conclusions when applying the “significant nexus” test. 

The ACOE and EPA have attempted to clarify through guidance federal jurisdictional waters, but those guidance documents have been vacated by the Courts (see prior post).  The courts made clear a formal rule was necessary for EPA and ACOE's scientific interpretations to have legal force.

On March 25, 2014, EPA and the Army Corps of Engineers jointly released their proposed rule defining the terms “waters of the United States” under the Clean Water Act.  Under the proposal, the federal agencies attempt to move away from the case-by-case application of the “significant nexus” test by simply defining certain waters as under federal jurisdiction.

 Proposal Maintains Jurisdiction over Navigable Waters

Under the proposed rule, the following waters are jurisdictional by rule, with no further analysis needed:

  • Navigable waters
  • Territorial seas
  • Interstate waters
  • Tributaries of navigable or interstate waters
  • Adjacent waters and wetlands

The EPA and ACOE state they are not expanding the definition of these categories in the proposed rule.  Rather, these categories represent those waterways that have been consistently recognized as subject to federal jurisdiction in prior rule making.

Expansive Proposed Definition of Tributary

The rule proposal does contain an entirely new definition of "tributary," which under the proposed rule, would be classified as jurisdictional waters with no further analysis.  If the rule were finalized, it would eliminate most case-by-case decision making on federal jurisdiction.  Under the proposal, a “tributary” is any waterway that meets the following characteristics:

·       Can have perennial, intermittent or ephemeral flow

·       Has a defined bed, bank and ordinary high water mark (a term defined under existing regulations)

·       Contributes flow, either directly or through another water, to as jurisdictional water

·       Or, is part of a network that drains to a jurisdictional water

The portion of the definition which states any waterway that contributes flow “directly or through another water” to a jurisdictional water, is very expansive.  It is these waterways with more tenuous connections to "navigable rivers" that have been the subject of litigation.  The proposed rule would eliminate any doubt for the vast majority of such streams and wetlands-  they would be under federal jurisdiction.  

The tributary definition includes wetlands, lakes, ponds that contribute flow to a navigable or interstate water.  It also includes ditches, except in upland areas that don’t contribute flow to a jurisdictional water. 

The rule proposal states the connectivity demonstration can be made using aerial photos and/or USGS maps or other evidence.  However, only the connection must be demonstrated.  There does not need to be any individualized demonstration that the waterway in question impacts the chemical, physical, and the biological integrity of a navigable water. EPA argues its review of the science demonstrates the vast majority of tributaries have such impacts.

While it difficult to come up with a stream or wetland that would likely not fit the definition of tributary, the rule still proposes to a catchall provision which states jurisdiction may still be asserted over any waterway on a case-by-case basis.  The catchall provides EPA and ACOE for regulate streams and wetlands that may not meet the expansive definition of tributary.

EPA Argues Proposal Rule Supported by Science

EPA states that the proposal to expansively define tributary to automatically include most waterways without a case-by-case demonstration is supported by scientific literature.  EPA conducted a review of published peer-reviewed scientific literature- “Connectivity and Effects of Streams and Wetlands on Downstream Waters:  A Review and Synthesis of Scientific Evidence.”   In it's review EPA concludes most waterways are interconnected and can impact water quality of larger streams and rivers.

In the proposed rule, EPA argues that its expansive definition of tributary is supported not only by science but by case law as well.  EPA discusses the various cases that have tried to address the "significant nexus" test.

Public Comment Period

A 90-day public comment period will begin once the proposal is published in the Federal Register.  The EPA states is seeks comments to its proposal as well as other ways to define which waters should be considered jurisdictional.  However, the proposal makes very clear that EPA believes its proposal is on solid ground.  

 Creative Commons photo by putneypics via Flickr

EPA Finds No Support in the Courts for Wetland Guidance

Ever since Rapanos,  EPA has struggled to consistently apply the "continuous surface connection" and "significant nexus test"  which both emerged from the Supreme Court decision. The two tests are to be used to determine whether wetlands fall within federal jurisdiction.  

To combat these inconsistencies, the Army Corps (ACOE)  has adopted guidance documents to help its staff apply the tests in the field.  The ACOE's first Post-Rapanos guidance document was issued in 2008. The U.S. EPA and ACOE worked together to draft the second Post-Rapanos guidance document in June 2011.  EPA's webpage still identifies the 2011 guidance as "draft."

Federal Courts Limit ACOE and EPA Use of Guidance

National Mining Association v. Lisa Jackson

While EPA and the ACOE continue to try and use guidance to clarify their regulations, the courts have severely limited application of guidance in wetland permit reviews.  In the latest decision, National Mining Association v. Lisa Jackson (Oct. 6, 2011), the U.S. District Court for the District of Columbia struck down policies and procedures adopted by U.S. EPA and the Army Corps of Engineers (Corps) regarding dredge and fill permits under the Clean Water Act.

The guidance involved "mountaintop removal mining," where rock and soil overburden is moved from atop coal seams and placed drainage channels.  In 2009 the EPA, Corps, and the U.S. Department of Interior entered into a memorandum which outlined when EPA would review Section 404 permits that involved surface coal mining and water quality impacts.

EPA argued that the memo clarified the procedural process for reviewing Section 404 permits.  EPA says it had broad discretion to establish procedures in how to implement statutes.

The Court disagreed.  It said that the memo had the legal impact of a rule because it imposed unequivocal requirements.  Also, the Court said the Clean Water Act limits EPA's role to select functions in the Section 404 permit review process, such as issuing a veto of a permit if EPA determines it will have an "unacceptable adverse effect."  The Court said the memo tried to expand EPA permit review role beyond that enumerated in the CWA.  Therefore, the Court said the memo was actually a rule in disguise.

Precon Development Corp., Inc. v. ACOE

The National Mining decision follows the Fourth Circuit decision in Precon Development Corp., Inc. v. Army Corps of Engineers, in which the Court also limited use wetland guidance in permitting decisions.  In Precon, the Court refused to provide the same legal deference to the Corps permitting decision because it had failed to adopt a rule for applying the "significant nexus test." 

In Precon, the Corps had utilized its 2008 Post-Rapanos guidance document in arriving at its decision a wetland was subject to federal jurisdiction.  The Court found that ACOE administrative record supporting its determination was inadequate.  The Court said the ACOE must find some evidence that the wetlands and other water bodies at issue perform functions that are considered "significant" for there to be determined a connection to a navigable water. 

The Court suggested the ACOE jurisdictional review may have been entitled to more deference if the Agency had adopted a rule rather than using guidance in making its decision.  The Court said it would not give as much deference to the ACOE application of the "significant nexus test" in this case because the Agency relied the 2008 Post-Rapanos guidance and not a rule. 

Conclusion

The EPA and ACOE's 2011 Post-Rapanos guidance has still not been finalized.  The public comment period was closed in July. 

Both the National Mining and Precon cases demonstrate that, even if the guidance is finalized, the Agency's jurisdictional determinations will not receive as much deference without a formal rule.  Furthermore, if any aspect of the 2011 guidance is found to impose unequivocal requirements on Section 404 applicants it could be struck down as illegal rulemaking.

 

EPA Inspector General Reports Impact of Rapanos Uncertainty

U.S. EPA's Office of Inspector General released a report regarding the effects of the Supreme Court's decision in Rapanos on enforcement of Section 404 of the Clean Water Act.  The report, titled Comments Related to Effects Jurisdictional Uncertainty On Clean Water Act Implementation, contains some interesting observations and discussion.  Bottomline, the lack of clarity for determining whether wetlands or waterways fall within the jurisdiction of the Clean Water Act has led to U.S. EPA dropping hundred of enforcement cases. 

Overall, CWA enforcement activities (for Sections 311 (oil spills), 402 (National Pollutant Discharge Elimination System), and 404) have decreased since the Rapanos ruling. An estimated total of 489 enforcement cases (Sections 311, 402, and 404 combined) have been affected such that formal enforcement was not pursued as a result of jurisdictional uncertainty, case priority was lowered as a result of jurisdictional uncertainty, or lack of jurisdiction was asserted as an affirmative defense to an enforcement action.

Some interesting observations by the EPA lawyers who are  trying to provide advice to those enforcing the Clean Water Act:  Here are two notable comments about the legal terms that are causing uncertainty:

Traditional navigable waterways evade easy definition; even the Supreme Court has been vague on the precise scope of traditional navigable waterways. Traditional navigable waterways have arisen in multiple legal contexts over the years, not just in CWA discussions. Many stakeholders find the Appendix D definition to be still too broad to adequately serve the jurisdictional issues created by the Rapanos decision. The OGC attorneys noted that there had been considerable discussion about the scope of traditional navigable waterways in Fall 2007. Traditional navigable waterways continue to be an issue in some "isolated (a)(3)" elevations.

"Adjacency" was not addressed by the Supreme Court. Although there are 1-2 sentences on it in the interim June 2007 guidance, it remains an imprecise term. However, OGC staff is working with various program offices to create a follow-up to the June 2007 Rapanos guidance where adjacency, among other things, will be addressed. The real debate involves the interpretation of one aspect of the "adjacency" definition: "neighboring." This "neighboring" term was a cornerstone of the debate in the Carabell case.

The blog Great Lakes Law provides a good summary of the aftermath of the Rapanos Decision as well as discussing the possible legislative fix currently being debated in Congress:

Rapanos / Carabell vs. United States resulted in a divided Court issuing a confusing 4-4-1 divided ruling that cast doubt on whether non-navigable tributaries and their associated wetlands were protected by the Clean Water Act. The Rapanos decision has put at risk safeguards for approximately 60% of the nation’s stream miles (exclusive of Alaska) and their neighboring wetlands.

If nearly 60% of the rivers and wetlands are "unprotected" under federal law, it would seem there would be strong pressure on the States to fill the void.  That pressure is being felt in Ohio where it has proposed a new permit program for impacts to streams.  This proposed rule, if it goes final, would likely be challenged.  This could lead to the State of Ohio's own Rapanos-type decision in the State Supreme Court.  Although that is a long way off.

Outside of new regulations, some states have legal authority that appears broader then federal jurisdiction over waterways.  I wonder whether in any of the 500 cases the U.S. EPA  has dropped they attempted to make a reverse referral to the States for enforcement.   For instance, Ohio Revised Code 6111 has a very broad definition of "Waters of the State" which could form the basis of a State enforcement action:

“Waters of the state” means all streams, lakes, ponds, marshes, watercourses, waterways, wells, springs, irrigation systems, drainage systems, and other bodies or accumulations of water, surface and underground, natural or artificial, regardless of the depth of the strata in which underground water is located, that are situated wholly or partly within, or border upon, this state, or are within its jurisdiction, except those private waters that do not combine or effect a junction with natural surface or underground waters.

Many are pinning their hopes on a Congressional fix that would expand federal jurisdiction beyond navigable waters or those with a "significant nexus" to a navigable water.   Legislation has been proposed- the Clean Water Restoration Act.  It would redefine fedral waterways covered by the Clean Water Act by dropping the term "navigable" as a qualifier to which waters are covered.  It would also add the following language regarding federal

WATERS OF THE UNITED STATES.—The term ‘waters of the United States’ means all waters subject to the ebb and flow of the tide, the territorial seas, and all interstate and intrastate waters and their tributaries, including lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, natural ponds, and all impoundments of the foregoing, to the fullest extent that these waters, or activities affecting these waters, are subject to the legislative power of Congress under the Constitution."

This language would certainly capture virtually every water way.   However, it is very controversial.  Especially out West.  Perhaps with Democratic control this legislation will begin to move, but it still faces a huge challenge.  As a result, states will be feeling increasing pressure, like Ohio has, to exercise existing authority in an attempt to fill the void left by the Rapanos decision.

(Photo: whiskymac/everystockphoto.com)

Controversial Ohio EPA Rule Proposes New Permit For Impacts To All Streams

On September 12, 2008, Ohio EPA issued proposed rules that would require a new permit, called a "state water quality permit", for all dredge or fill impacts to non-federally regulated streams.  Ohio may be the first state in the country to try and expand state stream permit requirements in reaction to recent U.S. Supreme Court decisions limiting the coverage of the Clean Water Act.  As discussed below, Ohio's effort will be controversial.

 The Supreme Court in Rapanos and SWANCC limited federal jurisdiction of the nation's waterways based upon its interpretation of the Clean Water Act's trigger for jurisdiction- "Navigable Waters".  In a prior post (Narrowing Federal Jurisdiction Over Waterways), I discussed the pressure mounting on States to react to federal court decisions which leave many waterways unprotected.  

Currently, Ohio EPA only requires a permit (401 permit) to fill or dredge a stream if the stream is under federal jurisdiction.   No permit is required if a stream is considered a state waterway but not a federal waterway.

In the past this approach didn't matter much because the Army Corps had a very expansive interpretation of federal waterways.  However, with the federal authority shrinking based upon a flurry of recent federal court decisions, the State felt it could no longer allow more and more streams to go unprotected.  In reaction, they have proposed a new rule that would require a permit for dredge or fill activity on any Ohio waterway, defined as "waters of the state" under Ohio Revised Code 6111.01(H). 

While Ohio EPA's action is understandable, after reviewing the rule, the Agency may be overcompensating.  The definition of a "water of state" is quite expansive under O.R.C. 6111.01(H), it includes:

 "...all streams, lakes, ponds, marshes, watercourses, waterways, wells, springs, irrigation systems, drainage systems, and other bodies or accumulations of water, surface and underground, natural or artificial, regardless of depth of the strata in which underground water is located, that are situated wholly or partly within, or border upon, this state, or are within its jurisdiction, except those private waters that do not combine or effect a junction with natural surface or underground waters."

I can see the lobbyists now, holding up pictures of a small puddle and arguing that Ohio EPA would require a permit for putting a few shovels of dirt in the hole.  Only problem is there is not much in the rule to refute this claim from a purely legal perspective.  The rule does not contain an exemption from permit requirements for small water bodies or deminimis impacts. 

In my experience the Agency is typically not persuasive when it argue "just trust us" to apply the regulation fairly.  As a result, there is no doubt this rule package will be very controversial. 

Other issues with the package include the following:

  1. Same Level Review for All Impacts-  While flawed, Ohio's isolated wetland permit requirements appropriately tries to match the level of review required with the amount/severity of impact.  The proposed rule makes no such effort.  All impacts are required to submit the same amount of technical information as part of their application. Also, all projects will be reviewed within 180 days, expedited review requirements for smaller projects is not included in the rule.
  2. Drainage Ditches- Who can clean out a ditch and when has been a controversial issue in Ohio for some time.  The proposed rule would put significant limitations on when ditches can be cleaned out for purposes of flood control or drainage.
  3. Clean Fill Materials- The rule limits fill to material "free from toxic contaminants in other than trace quantities."  While this limitation often appears in 401 permits, it has always been vague.  The rule adds no clarity to what is considered "trace quantities."  For instance, arsenic is naturally occurring in most Ohio soils.  Couldn't this limit be viewed to prohibit use of even typical Ohio farm soil as fill?
  4. All Permit Applicants Will Have to Wait-  The rule requires every applicant provide a copy of a determination letter from the Army Corps of Engineers as to whether the waters to be impacted are within federal jurisdiction.  Shouldn't some waters be just obviously not within federal jurisdiction?  This requirement is problematic because the Army Corps has been very slow to issue jurisdictional determinations. 
  5. Ohio EPA Guidance Elevated to Legal Requirements-  The rule requires all applicants evaluate the quality of streams in accordance with a series of technical guidance developed by Ohio EPA.  While these guidance documents have been used for years in permit reviews, it certainly will be controversial to make them mandatory. 

Comments on the rule package are currently due October 27, 2008.  However, business associations  are already requesting Ohio EPA allow for more extensive public involvement in the development of the rules.

 (Photo: flickr, heather0174)

Update: Shrinking Jurisdiction Leads EPA to Drop Hundreds of Clean Water Act Cases

In a prior post discussing the impact of the Supreme Court's rulings limiting federal jurisdiction over waterways, I discussed how state's may feel increasing pressure to fill the gaps in federal authority.  A recent article in the Boston Globe on diminished EPA enforcement suggests the states are probably dusting off their legal theories as we speak. The Globe reported the following: 

The Bush administration didn't pursue hundreds of potential water pollution cases after a 2006 Supreme Court decision that restricted the Environmental Protection Agency's authority to regulate seasonal streams and wetlands.

From July 2006 through December 2007 there were 304 instances where the EPA found what would have been violations of the Clean Water Act before the court's ruling, according to a memo by the agency's enforcement chief.

Two questions I have relative to this story.  First, does this foretell a strange trend where US EPA starts referring cases to the states for enforcement?  Second question- when will the battle shift to permitting?  It cannot be long before a company challenges federal authority to require an NPDES permit.  The most likely candidate in my mind will be something like the requirement to obtain a permit for construction activities.

Narrowing Federal Jurisdiction Over Waterways

The USA Today did a story on the huge debate taking place over the limits of federal jurisdiction over waterways.   The debate ensued in the aftermath of two major Supreme Court cases dealing with federal jurisdiction over wetlands. 

Early on the focus after Rapanos and SWANCC was which wetlands would receive federal protection.  Now, after a series of federal district court rulings and proposed federal legislation, the debate has grown to be much larger.  The States may soon find themselves in the middle scrambling to fill some large holes in federal authority.

(Image: Colin Gregory Palmer/everystockphoto.com)

At issue was the term "navigable waters" which appears repeatedly in the Clean Water Act.  Both Rapanos and SWANCC looked at that term as it related federal jurisdiction over wetlands.  The Supreme Court ruled that Congress, by using the term "navigable waters", did not intend to use its full powers under the Commerce Clause of the Constitution.  Rather, Congress limited exercise of its authority to waters and wetlands that had some significant connection to a "navigable in fact waterway." 

Unfortunately the Court could not agree on a clear test for determining which waters are federally protected.  Justice Kennedy's broader "significant nexus" test seems to have emerged as the most relevant test.  Under the "significant nexus" test, any stream, pond, wetland or other waterway that has a "significant nexus" to a navigable water is federally protected.  "Significant nexus" means it has a significant effect on the chemical, physical, and biological integrity of the navigable water.

The grey area are intermittent streams and isolated ponds/wetlands.  Litigation has seen a clash between experts arguing over whether there is some significant hydrologic connection to a navigable water. 

Now two major cases have expanded the debate from beyond just wetlands.  Back in 2006, the 5th Circuit in United States v. Chevron Pipe Line Co. 437 F. Supp. 2d 605, 614 (N.D. Tex. June 28, 2006)  drastically limited the federal government's authority to pursue spill and contamination in waterways.  Chevron involved a major oil spill of 126,000 gallons.  The Company successfully argued there was no federal violation resulting from the spill because contamination only reached intermittent streams that had no flow during the time of the spill or during clean up.  The Court put the burden on U.S. EPA to prove contamination actually reached a navigable water.

In March, a Federal Court vacated U.S. EPA's SPCC Rule (API v. Johnson, No. 02-2247, 2008 U.S. Dist. LEXIS 25859 (D.D.C March 31, 2008) because it contained an overly broad definition of navigable water.  The Court ruled there was no way U.S. EPA could defend the regulation in light of the recent Supreme Court rulings limiting federal jurisdiction.  The result of this ruling may be less facilities will need to prepare spill control plans. 

Many are focused on the proposed federal legislation as the viable fix to these gaps in federal authority. The legislation would expand coverage under the Clean Water Act from "navigable waters' to "waters of the United States".   As highlighted in the USA Today article, given the controversy over such a large expansion of federal jurisdiction, I don't see legislation passing anytime soon.  This means the States, who have broader authority will soon be facing the prospect of filling the gaps in federal authority using state permitting or enforcement authority.