April 30 2016:

On February 26th, the three judges in the U.S. Court of Appeals for the 6th Circuit who are fielding challenges to the federal Clean Water Rule (CWR) (Murray Energy Corp. et al. v. EPA/U.S. Army Corps of Engineers) got one step closer to actually ruling on the merits of the case when they turned down the many plaintiffs requesting that their February 2016 ruling on jurisdiction be reheard by the full (en banc) 6th Circuit. The denial to rehear rebuffs the argument by the plaintiffs that the case should be litigated in the U.S. district courts rather than having the 6th Circuit itself rule on consolidated challenges, as the panel had previously decided in agreement with the EPA/Corps.

The WOTUS rule is still stayed (not allowed to be implemented) and the 6th circuit still may rule that they are qualified to rule on the merits of the WOTUS rule.

The 6th Circuit declined to rehear the rule en blanc which should be no surprise. It is rare for a Circuit court to strike down a federal rule en blanc.

The 6th Circuit is still considering 22 separate petitions objecting to portions of the rule. If the 6th Circuit agrees to consider these petitions, which is likely, a separate panel of 3 judges in the 6th Circuit will consider the merits of these positions. The Obama Administration has petitioned the 6th Circuit to uphold the rule, as we know. But the court remains determined to stay the rule until a decision has been made on the merits.

We as an industry still have hope the 6th Circuit will require EPA to rewrite portions of the rule. We are still weeks away from a decision.

The Obama Administration still wants all cases grouped into the 6th Circuit, which would mean the various District court rulings would be negated, but that decision hasn't been made, and may be weeks away from being decided as well.

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Background:
In 1972, one of the banner years of the environmental movement, the Clean Air Act, the Federal Pesticide Control Act and the Clean Water Act all were enacted and assigned to the newly formed Environmental Protection Agency (EPA) for implementation.

More than forty years later the EPA continues to tinker with the respective requirements and jurisdictions. The EPA and the United States Army Corps of Engineers (Corps), who regulate wetlands under the Clean Water Act, have proposed a regulation purporting to better define “Waters of the United States” and to more accurately reflect what they see as their regulatory jurisdiction. Linked to administration mandated climate change-related policies, the Endangered Species Act and a resulting jurisdictional expansion of NPDES requirements, it’s difficult to see how the proposed definition would NOT have an effect on our aquatic regulatory world.

The EPA/Corps proposed rule purports to more accurately define “waters of the US”, which has replaced the term “navigable waters” in the regulatory parlance. A good solid definition will explain to the regulated community the boundaries of their unpermitted activities and should thus reduce the seemingly endless litigation that has resulted from both the regulators and the regulated pursuing their own respective interpretations of the jurisdiction of the Clean Water Act.

One of the biggest objections to the proposed rule is the process. Accustomed to governing by Executive Order and judicial fiat in lieu of expressed statutory authority, the EPA and the Corps are proposing to define by rule what is already defined by statute.

The EPA and the Corps base their proposed rule on Rapanos v. United States, 547 U.S. 715 (2006). Without getting into the details of the case, one of several issues before the U.S. Supreme Court was the jurisdictional issue of whether the 22 acres of wetlands Mr. Rapanos filled in with sand fell under the requirements of the Clean Water Act. Rapanos argued that the property was over 20 miles away from any navigable water. The EPA and the Corps disagreed and claimed the so-called wetlands were jurisdictional as waters of the U.S. The Court was split on this issue with four conservative judges voting for a more strict reading of “navigable waters” than the four more liberal judges. Justice Kennedy didn’t agree with either wing and wrote his own opinion and it is this opinion which provides both the scientific and legal underpinning of the proposed rule. Justice Kennedy holds that a wetland or non-navigable water body falls within the Clean Water Act’s scope if it bears a “significant nexus” to a traditional navigable waterway. The nexus (link) exists where the wetland or water body, either by itself or in combination with other similar sites, significantly affects the physical, biological, and chemical integrity of the downstream navigable waterway. It’s starting to appear that jurisdictional clarity might not be so obvious and determinations will require a bit more than simply looking at a map.

Here’s how the proposed regulation defines Significant Nexus:

The term significant nexus means that a water, including wetlands, either alone or in combination with other similarly situated waters in the region (i.e., the watershed that drains to the nearest water identified in paragraphs (s)(1) through (3) of this section), significantly affects the chemical, physical or biological integrity of a water identified in paragraphs (s)(1) through (3) of this section. For an affect to be significant, it must be more than speculative or insubstantial. Other waters, including wetlands, are similarly situated when they perform similar functions and are located sufficiently close to a “water of the United States” so that they can be evaluated as a single landscape unit with regard to their effect on the chemical, physical, or biological integrity of a water identified in paragraphs (s)(1) through (3) of this section.

As you might imagine, the pro forces aligning with EPA and Corps resemble a who’s who of environmental organizations. The antis have the familiar faces of agriculture, business leaders, realtors and developers and a whole panoply of state and local officials and agencies who see the new definitions as a play by the feds to usurp the traditional authority of the states to regulate waters and wetlands previously deemed to be “waters of the State”. It does appear, given the allusions to a watershed approach to establish the jurisdiction of the federal agencies, that the proposed rule will likely absorb state waters and wetlands into the new “waters of the U.S.”. Over the years, the Supreme Court has consistently restrained the EPA and the Corps’ just as consistent attempts to expand their jurisdiction under the Clean Water Act. It is indeed unfortunate the plurality vote in Rapanos provided the vehicle for the agencies to cherry pick the opinion that most aligned with their environmental goals.

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