Wednesday, March 8, 2017

Shale Law in the Spotlight: Executive Order on the “Waters of the United States” Rule

Written by M. Sean High—Staff Attorney and Errin McCaulley – Research Assistant

On February 28, 2017, President Donald J. Trump signed an Executive Order directing the Administrator of the Environmental Protection Agency (Administrator) and the Assistant Secretary of the Army for Civil Works (Assistant Secretary) to review the current federal “Waters of the United States” rule (WOTUS).  The outcome of this review could have significant implications for both the agricultural and energy sectors.  

Under the Executive Order, the Administrator and Assistant Secretary are required to review WOTUS to determine if the current rule is consistent with the order’s stated policy:

[T]o ensure that the Nation’s navigable waters are kept free from pollution, while at the same time promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of the Congress and the States under the Constitution.

Upon completion of this review, the Administrator and Assistant Secretary are to propose a rule either rescinding or revising the current rule.  Regarding ongoing WOTUS litigation, the Attorney General is permitted to inform “any court of such review and take such measures as he deems appropriate concerning any such litigation pending the completion of further administrative proceedings related to the rule.” Significantly, for future WOTUS rulemaking, “the Administrator and Assistant Secretary shall consider interpreting the term ‘navigable waters,’ as defined in 33 U.S.C. 1362(7), in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States, 547 U.S. 715 (2006).”

Background
Clean Water Act
Congress, in amending the Federal Water Pollution Control Act, passed the Clean Water Act (CWA) “to restore and maintain the chemical, physical, and biological integrity of the Nation's waters.” 33 U.S.C. § 1251(a).  Generally, CWA empowers the Environmental Protection Agency (EPA) and Army Corps of Engineers (ACE) to regulate pollutant discharges into “navigable waters.” 33 U.S.C. § 1311(a).  The phrase “navigable waters,” is further defined as “the waters of the United States, including the territorial seas.” 33 U.S.C. § 1362(7).  

Rapanos
Persistent disputes over the meaning of “waters of the United States” led to a series of cases and resulted in the U.S. Supreme Court’s attempt to define “waters of the United States” in the case Rapanos v. United States, 547 U.S. 715 (2006).  In Rapanos, the Supreme Court concluded that ACE’s interpretation of the phrase “waters of the United States” was an impermissible construction of the CWA.  Id. at 739.  Nevertheless, the Court also appeared to invite rulemaking to further clarify the meaning of “the waters of the United States.” Id. at 718. 

Justice Antonin Scalia, who authored the plurality opinion, stated that regarding the phrase “navigable waters”:
“[T]he waters of the United States” includes only those relatively permanent, standing or continuously flowing bodies of water “forming geographic features” that are described in ordinary parlance as “streams[,] ... oceans, rivers, [and] lakes.” . . . The phrase does not include channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall.
Rapanos, 547 U.S. at 739.

In a concurring opinion, however, Justice Anthony Kennedy developed a “significant nexus” test for determining federal jurisdiction over the Nation’s waters.  Justice Kennedy derived the “significant nexus” test from two earlier cases, Solid Waste Agency of Northern Cook Cty. v. Army Corps of Eng’rs, 531 U.S. 159 (2001) (SWANCC) and United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985) (Bayview Homes).  According to Justice Kennedy, prior to EPA or ACE asserting CWA jurisdiction over a wetland:
[T]he wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as “navigable.” When, in contrast, wetlands’ effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term “navigable waters.”
Rapanos, 547 U.S. at 780.  

In reference to Justice Kennedy’s opinion, Justice Scalia read the “significant nexus” test narrowly.  In addressing Justice Kennedy’s analysis, Justice Scalia noted that SWANCC and Bayview Homes rejected the notion that either EPA or ACE could rely upon ecological connectivity alone as a basis for CWA jurisdiction. Rapanos, 547 U.S. at 741.  Additionally, after a thorough analysis of the development of the “significant nexus” test in those cases, Justice Scalia reasoned that the “significant nexus” test is intended only to resolve a narrow ambiguity in the CWA, namely to determine where a navigable water ends and a wetland, marsh, or other feature begins. Justice Scalia wrote:
[O]nly those wetlands with a continuous surface connection to bodies that are “waters of the United States” in their own right, so that there is no clear demarcation between “waters” and wetlands, are “adjacent to” such waters and covered by the Act. Wetlands with only an intermittent, physically remote hydrologic connection to “waters of the United States” do not implicate the boundary-drawing problem of Riverside Bayview, and thus lack the necessary connection to covered waters that we described as a “significant nexus” in SWANCC.
Rapanos, 547 U.S. at 741. Ultimately, Justice Scalia concluded, in order for a feature to be within the scope of the CWA, the feature must either satisfy the definition of “waters of the United States,” provided above, or maintain a “continuous surface connection” with a water that meets the definition of “waters of the United States.” Id. 

WOTUS
In promulgating WOTUS, EPA and ACE explicitly based the final rule on Justice Kennedy’s “significant nexus” analysis. See 80 Fed. Reg. 37,056 (June 29, 2015).  Additionally, EPA and ACE relied upon Justice Kennedy’s reading of the purpose of the CWA.  The agencies concluded “the critical factor in determining the CWA’s coverage is whether a water has a ‘significant nexus’ to downstream traditional navigable waters such that the water is important to protecting the chemical, physical, or biological integrity of the navigable water.” 80 Fed. Reg. 37,056 (June 29, 2015).  As a result, the “significant nexus” analysis per WOTUS focuses generally on ecological connectivity, physical indicators such as a high-water mark, geographic proximity to navigable waters, and a contested feature’s location within a 100-year floodplain.

Currently, WOTUS is not in force due to a nationwide stay of the final rule issued by the Court of Appeals for the Sixth Circuit. See In re EPA, 803 F.3d 804 (6th Cir. 2015).   

Conclusion
If EPA and ACE substantially adopt Justice Scalia’s opinion in Rapanos, many provisions in WOTUS will require revision. Several of the eight categories of features EPA and ACE announced in WOTUS to be jurisdictional waters under CWA likely fail Justice Scalia’s analysis.  For example, WOTUS includes in its coverage prairie potholes and pocosins. 80 Fed. Reg. 37,105 (June 29, 2015).  These features, however, generally lack a continuous surface connection with “waters of the United States.”


Although a specific timeline for agency review of WOTUS was not provided in the Executive Order, EPA and ACE cannot simply repeal WOTUS; the agencies must issue a proposed rule to revise or replace the rule.  In response to the Executive Order, EPA and ACE stated: “[a] revised rulemaking based ‘on a reevaluation of which policy would be better in light of the facts’ is ‘well within an agency’s discretion.’” 82 Fed. Reg. 12,532 (Mar. 6, 2017).  This rulemaking process could last well over a year as the notice-and-comment period for the previous WOTUS rulemaking process resulted in over one million comments after the proposed rule’s publication in April 2014. 

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