Unwind of WOTUS Gets Us Back to the Beginning

The Trump Administration has promised massive deregulation, in particular reductions in environmental regulations. A major target of the Trump Administration's deregulation agenda is the Obama Administration's Waters of the U.S. Rule (WOTUS) which defines which wetlands and streams are federally regulated.

However, as described in this post, despite the controversy, all of the regulatory activity over the last several years really just leaves us in the status quo.  

CWA Defines Jurisdictional Waters

Section 301(a) of the Clean Water Act (CWA) prohibits discharges of pollutants to "navigable waters" without a permit.  See, 33 U.S.C. Section 1311(a), 1362(a).   The CWA defines "navigable waters" as "waters of the United States..." See, 33 U.S.C. Section 1362(7)

However, what exactly constitutes "waters of the United States" has been controversial since passage of the CWA in 1972.  

Supreme Court Weighs in Three Times

The Supreme Court has addressed the issue of "waters of the U.S." on three separate occasions:

  • Adjacent waters- In the Court's initial decision, it captured the issue of the extent of federal jurisdiction succinctly- "Between open waters and dry land may lie shallows, marshes, mudflats, swamps, bogs--in short, a huge array of areas that are not wholly aquatic but nevertheless fall far short of being dry land.  Where on this continuum to fine the limit of "waters" is far from obvious." The Court said the term "navigable" in the statute is of little import.  The history of the CWA shows Congress intended broad regulations of waters. In this case, the Court concluded the wetlands adjacent to "waters of the U.S." were federally regulated.  See, United States v. Riverside Bayview Homes 474 U.S. 121 (1985)
  • Habitat for Migratory Birds- The Court determined the Army Corps went too far trying to assert federal regulation over intrastate waters on the basis the waters provide habitat for migratory birds. SWANNCC v. U.S. Army Corps of Engineers, 531 U.S. .159 (2001)  
  • Scalia and Kennedy Tests-  The third time the Court visited the issue it could not get five justices to agree on the extent of federal jurisdiction under the CWA.  Two tests emerged- Justice Scalia's and Justice Kennedy's.  Justice Scalia limited federal jurisdiction to navigable waters, adjacent wetlands and non-navigable streams that are permanent flow year round or at least seasonally. Justice Kennedy extended jurisdiction further, to any waters with a "significant nexus" to navigable waters.  Rapanos v. U.S., 547 U.S. 715 (2006)

Post-Rapanos the uncertainty and litigation continued over the extent of federal regulation.

Obama WOTUS Rule

In 2015, the Obama Administration attempted to put an end to the uncertainty by defining "waters of the U.S." by rule (WOTUS).  Under the proposal federally regulated waters included the following:

  • Streams with perennial, intermittent or ephemeral flow
  • Defined bed, bank and an ordinary high water mark
  • Contributes flow, either directly or through another water, to a jurisdictional water
  • Part of a network that drains to a jurisdictional water
  • Excludes man-made ditches

Those opposed to the rule felt any small stream or water could meet the definition triggering federal regulation over even incidental creeks and streams or even drainage ditches.

The rules was immediately subject to over 20 legal challenges.  On October 9, 2015 the Sixth Circuit issued a stay of the effectiveness of the rule while its legality was determined.  

Litigation is before the Supreme Court to determine not the legality of the rule, but the proper venue the rule can be challenged.  Despite those who argue the Trump Administration is rolling back protections of waterways, the WOTUS rule never went into effect.  Instead, we still determine the extent of federal jurisdiction using the Scalia and Kennedy tests from Rapanos.

Trump Executive Order

Despite the fact the WOTUS rule was not in effect, on February 28, 2017, President Trump issued an executive order titled "Restoring the rule of Law, Federalism and Economic Growth by Reviewing the "Waters of the U.S. Rule."

The Executive Order had two goals:

  1. Rescind WOTUS;
  2. Issue an new rule interpreting "Navigable Waters" consistent with Justice Scalia's test in Rapanos.

Step 1- Rescinding WOTUS

July 27, 2017, EPA proposed revocation of WOTUS.  EPA accepted public comments on the proposed rule through September 27th.  

Step 2- Propose a New Definition of WOTUS

The next step will be for EPA to propose a definition of the rule that drops the Kennedy "significant nexus" test and limits jurisdiction to the test articulated by Justice Scalia.  However, similar to WOTUS, this rule will almost certainly face numerous legal challenges.

Back to the Beginning?

While the legal challenges work their way through the courts over the next several years, the law will not have changed since Rapanos was decided in 2006.  Both the Kennedy and Scalia tests for jurisdiction will be used by all circuits.  

For over forty years the issue of how far to extend federal jurisdiction over waters has not been conclusively decided.  It appears this issues will not have greater clarity for the foreseeable future.  

 

Waters of the United States?

Does this picture show a waterbody that should fall under federal protection pursuant to the Clean Water Act?

Do you believe this is a stream that has a "significant nexus" to a navigable waterway (current test established under Rapanos by Supreme Court Justice Kennedy)

Is it reasonable to require a Federal Section 404 and State 401 Water Quality Permit in order to fill this drainage way adjacent to the road?

Well, the Army Corps of Engineers (ACOE) issued a Jurisdictional Determination (JD) finding that this is a federally protected stream.  This is a perfect example of why so much controversy surrounds the extent of federal jurisdiction under the Clean Water Act.

Recap of Rapanos

Since Rapanos, Justice Kennedy’s “significant nexus” test has been used to determine jurisdiction for streams and wetlands. 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.

The significant nexus test is really a legal test, not a scientific one.  As such, the test is very subjective.  As a result, litigation has ensued over whether streams and wetlands fall under federal jurisdiction.

ACOE Extends its Reach

The ACOE applies the "significant nexus" test in making a JD.  It is the initial step in the process. However, as previously discussed in a recent post, it is difficult for a landowner to challenge a JD issued by the ACOE.  Their choice if they disagree with the Corps determination is either to proceed with the project and risk fines or acquiesce and initiate the permitting process.  

Perhaps in full recognition that most landowners will not fight a JD issued by the ACOE, certain Districts of the ACOE have been aggressive in their application of the "significant nexus" test.  The picture demonstrates one such example.  

Impact on EPA Rule

In attempt to address the increasing amount of litigation and uncertainty surrounding which water bodies fall under federal regulation, EPA released is proposed rule- "Definition of 'Waters of the United States' Under the Clean Water Act". The rule was released on March 25, 2014.

Many in the business community have commented that EPA's proposed rule provides certainty by purporting to regulate virtually all waterways. The rule proposal contains an entirely new definition of "tributary," which under the proposed rule, would be classified as jurisdictional waters with no further analysis.  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 Agency's proposed rule is controversial due to its open ended language providing discretion to capture almost anything as a federally protected stream.

Take the picture above, it could be argued this ditch has intermittent flow.  It may have a defined bed and bank.  If you traced its connections long enough, you probably could find another waterway to which it contributes flow.  

It is understandable why EPA would want to maintain the flexibility to broadly assert federal jurisdiction. There are many small tributaries that can impact water quality if destroyed.  EPA is worried about leaving such tributaries unprotected and allowing large impacts to those waterways with no oversight.

However, broad language cuts the other way as well.  The roadside ditch in the picture can also be deemed legally protected.  As such, the landowner, municipality or developer is forced to navigate a lengthy and costly permitting process to impact the ditch.  

A Reasonable Compromise?

Perhaps the vagueness of the "significant nexus" test isn't such a bad thing.  It allows those small tributaries to be protected.  At the same time, the test allows for a legal demonstration that a small waterway is not worth protecting because it has no real value.

The issue is the inability of landowners to cost effectively challenge JD issued by the Corps. Perhaps establishing an administrative appeal process that would allow for quick challenges to JD determinations would be a reasonable compromise.

[UPDATE:  AFTER FURTHER INTERNAL REVIEW, I HAVE BEEN INFORMED THE ARMY CORPS AGREED TO NOT CALL THIS DITCH A JURISDICTIONAL WATERWAY]

 

Ohio EPA Wants to Take Over Wetland and Stream Permitting from the Army Corps of Engineers

Another aspect of Governor Kasich's controversial proposed legislation- Senate Bill 315- is to provide the legislative authority for Ohio EPA to take over Section 404 Clean Water Act permitting from the Army Corps of Engineers.  Section 404 permits are needed prior to impacts to streams or wetlands within federal jurisdiction. 

The bill itself doesn't really do that much.  It simply provides the authority to the Director of Ohio EPA to seek approval from U.S. EPA to assume responsibility for administering the Section 404 permitting program.  The real important issues will be covered in the approval request itself. 

As discussed below, the biggest issue Ohio EPA faces is to convince U.S. EPA in its request that it has sufficient resources to take over all the Section 404 permitting functions from the Army Corps.

What's good about the proposal

Right now any developer that needs to impact wetlands or streams as part of their development will typically need to obtain two permit approvals.  First, they must obtain a Section 401 Water Quality Certification from Ohio EPA.  Second, if the wetland or stream is considered within federal jurisdiction, the developer must obtain a Section 404 permit from the Army Corps of Engineers. 

The fact two permits will be needed won't change if Ohio takes over the Section 404 program.  However, developers will have the opportunity to go to one regulator to obtain both certifications.  This will hopefully streamline the process. 

Another major complication under the current structure is that Ohio is divided among four different Army Corp Districts- Pittsburgh, Buffalo, Louisville and Huntington.  Each of the Districts has very different ways they process Section 404 permits.  Therefore, another benefit of Ohio taking over the program would be greater consistency. 

Approval Process Will Be Lengthy and Difficult

While there are good reasons for Ohio to take over Section 404 permitting, it will be a very lengthy and difficult process.  First, Ohio EPA will have to show that it has sufficient resources to handle all the duties performed by the Army Corps.  I have heard projections that this could take up to forty (40) additional staff in Ohio EPA wetland section. 

This would be a very substantial increase in staff and the resources will be very difficult to come by.  Unless, Ohio EPA is going to direct fees that are currently being used to support other programs, the Agency would need to seek a fee increase or new fee.  While applicants may like the streamlined process, its unlikely they will want to pay substantially more for it. 

If the Director was going to tap into current fees, such as the solid waste disposal fee, he will have to likely cut other programs.  Also, the solid waste industry may object to use of the disposal fees to pay for significant new staff in program that doesn't directly deal with management of solid waste.

Even if Ohio EPA clears the hurdle of demonstrating sufficient resources, it will still need to prove to U.S. EPA its has the legal authority to carry out the same functions as the Army Corps.  The last time the State of Ohio tried to convince U.S. EPA of something similar it was transfer of the water permitting program (NDPES) for large farms to the Department of Agriculture.  This process has taken years and involves only a transfer between two state agencies. 

While the idea may sound good in theory, Ohio faces a significant uphill climb to make this proposal a reality.