The Clean Power Plan and Waters of the U.S. Rule have dominated much of the discussion at the ABA’s Spring Meeting of the Section of the Environment, Energy and Resources (SEER) in Chicago. SEER is a gathering of nations prominent environmental and energy attorneys from both the private sector and government.
Waters of the U.S. Rule (WOTUS)
The WOTUS rule defines the jurisdiction of the Clean Water Act. WOTUS was issued after the Supreme Court suggested in the Rapanos decision that the regulated community would benefit from a rule. EPA released the rule earlier this summer. As previously discussed in a prior post, the Sixth Circuit has issued a stay of the EPA’s WOTUS rule after numerous lawsuits have been filed.
Steven Neugeboren, Associate General Counsel, Water Law Office, U.S. EPA, discussed the Agency’s development of the rule. He emphasized that the Administrator’s directive in developing WOTUS was to "follow the science." He opined that part of the reason for all of the litigation and controversy surrounding the rule is based upon "speculation" and "fear" fostered by some in the regulated community regarding the scope of the rule.
As an example, Mr. Neugeboren cited to public comments on the draft of the rule that argued EPA was trying to regulate puddles. EPA responded by putting specifically in the final rule that puddles are exempt form regulation. In response, he indicated some commented that the inclusion of the exemption was an indication EPA planned to regulate puddles all along.
Comments on the private bar during the conference have centered on the broad scope of the rule. EPA’s approach in the rule was described as extending regulation to virtually every waterway and relying upon narrow exemptions to carve out instances EPA deems regulations unnecessary. Due to the broad and vague language used in WOTUS there is tremendous uncertainty as exactly what is covered under the rule.
Are Wetland/Stream JD’s Appeallable? The Supreme Court Will Decide
As a first step in wetland/stream permitting, many developers and property owners will hire a consultant to perform a wetland and/or stream delineation on the property. The delineation is the consultant’s opinion as to whether federally protected wetlands or streams exist on the property. The delineation will also determine the size and quality of the water resources on the property. However, the consultant’s delineation is not a legal determination. Only the Army Corps of Engineers (ACOE) can determine if wetland or streams are federally protected. Therefore, although not required, many property owners/developers submit their wetland delineations to the ACOE for concurrence. This is called a "Jurisdictional Determination" or JD. See, 33 CFR 320.1(a)6)
The Eighth Circuit Court of Appeals determined that an approved jurisdictional determination (JD) is a final agency action that can be challenged. See, Hawkes Co., Inc. et al v. Corps, Case No. 13-3067 (April 10, 2015). The Court determined that if a JD is not appeallable a property owner is left with the Hobson choice of risking enforcement or acquiescing to the ACOE permitting process.
At the conference, a panel discussed the likelihood the the Hawkes case would be heard by the U.S. Supreme Court. Because there has been a split in the circuits, the panelists all believed the case would likely be heard.
Panelist Ray Ludwiszewski, attorney at Gibson, Dunn & Crutcher, offered his opinion that while the case would be heard, he believed the Court would determine a JD is not appeallable because JDs are voluntary. He distinguished JDs to the enforcement order that was issued by EPA in the Sackett case which compelled the property owner to comply.
Professor Richard Lazarus, Harvard, agreed that the voluntary nature of JDs may be a key factor in how the Court would rule, but he said the Court may rule JDs are appeallable because the Court, in prior decisions like Sackett, showed its "anger" over the EPA’s application of the 404 wetland/stream permitting and the "heavy handed nature of government regulation" in this area.
Clean Power Plan
Not surprisingly, EPA strongly defended the legality of the rule at the conference while attorneys from the private sector questioned its legal foundation. The biggest open issue regarding the legality of the Clean Power Plan was the scope of Section 111(D) of the Clean Air Act. Conference participants agreed the key issue is whether EPA’s authority Section 111(D) is limited to the "fence line" at a power plant or provides much broader authority to regulate the mix of energy (coal, natural gas and renewables) across the country.
Another issue discussed was the uncertainty caused by litigation The States must file their plans to comply (referred to as a "State Implementation Plan" or "SIP") by September 2016. The rule allows incentives to State’s to file SIPs. For example, states can get more time to develop their plans and cannot participate in a emission trading plan if they don’t submit a compliance plan. Despite the incentives, states that strongly oppose the rule may elect to not file a compliance plan.
Art Harrington, attorney from Godfrey & Kahn, discussed the uncertainty the rule is causing in his State of Wisconsin. The implementation time lines and requirements, especially with the cloud of litigation, is causing tremendous uncertainty in the regulated community.
Monica Trauzzi, reporter for E&ETV/E&E Publishing, commented that in her discussions with Governors and State agency air directors, the states are having conversations around development of compliance plans. Conversations are occurring even in states strongly opposed to the plan because the utility industry has been putting pressure on states due to the uncertainty associated with failing to comply with the plan.