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09.01.2023 | Legal Advisory

On August 29, 2023, the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers released a final rule revising the meaning of “waters of the United States” under the federal Clean Water Act (CWA). The revised rule comes in the wake of the Supreme Court’s May 2023 decision in Sackett v. EPA, which significantly narrowed the agencies’ jurisdictional reach over wetlands. The new rule does limit EPA’s jurisdiction in some respects but may not go far enough in implementing Sackett’s requirements.

Background on the Agencies’ Prior WOTUS Rule and Sackett

The CWA prohibits discharging pollutants into navigable waters, defined as “the waters of the United States” (WOTUS). Thus, the meaning of WOTUS establishes the geographic scope of federal jurisdiction under the CWA. The outer reaches of what constitutes jurisdictional waters has long been debated.

In January 2023, the agencies issued a final WOTUS rule that asserted CWA jurisdiction over:

• Waters used in interstate or foreign commerce (currently, formerly, or “susceptible” to future use)
• The territorial seas
• Interstate waters, including interstate wetlands
• Impoundments of waters if otherwise a covered water
• Tributaries of the above-listed waters if they are relatively permanent, standing or continuously flowing bodies of water or that significantly affect a covered water
• Wetlands adjacent to (i) a covered water, (ii) impoundments and tributaries of a covered water when there’s a continuous surface connection with the wetland, or (iii) impoundments and tributaries of a covered water when the wetland significantly affects that water.
  • “Adjacent” was defined as “bordering, contiguous, or neighboring.” The definition also included “adjacent wetlands” if they were separated from a covered water by “man-made dikes or barriers, natural river berms, beach dunes, and the like.”
• Other intrastate lakes and ponds, streams, or wetlands not identified elsewhere with a continuous surface connection to a covered water or that significantly affects one.

The decision to include waters that “significantly affect” a covered water was based on the “significant nexus” test first proposed by Justice Kennedy in his concurrence in the 2006 decision Rapanos v. United States. Justice Kennedy wrote that CWA jurisdiction over wetlands requires that the wetland be adjacent to a jurisdictional tributary and that there be a “significant nexus” between the wetlands and traditional navigable waters. This “nexus test” considered whether the wetlands “significantly affect the chemical, physical, and biological integrity” of covered navigable waters.

In Sackett, a 5-4 majority of the Court held the CWA’s jurisdiction extends only to those wetlands adjacent to traditional waters of the United States and “with a continuous surface connection” to those waters requiring the wetlands to be “indistinguishable from those bodies of water.” In doing so, the majority rejected the “significant nexus” test, thus invalidating substantial parts of the January 2023 WOTUS Rule.[1]

The New WOTUS Rule

The agencies’ new rule, which they have labeled “the conforming rule”, makes four principal changes, which the agencies assert are necessary to conform the rule to the Sackett decision. 

• The agencies will no longer consider the significant nexus test when considering whether a waterbody is subject to CWA jurisdiction.
• Interstate wetlands are no longer jurisdictional as interstate waters.
• Wetlands and streams are removed from the list of other intrastate waters covered by the CWA.
• The definition of “adjacent” wetlands now means “having a continuous surface connection” without reference to a geographic proximity between the wetland and the covered water.

The rest of the rule, including the existing WOTUS exclusions, is unchanged.

Unlike traditional federal rulemaking, the new WOTUS rule will be issued as final without a notice and comment process. The agencies claim they have “good cause” to do so under the federal Administrative Procedure Act (5 U.S.C. § 553(b)(3)(B)) because the changes purportedly are meant to conform to the Sackett ruling and “do not involve the exercise of the agencies’ discretion,” and don’t “impose any burdens on the regulated community.”

Analysis

The agencies’ removal of the significant nexus test was plainly required by Sackett and will substantially reduce the number of wetlands under federal jurisdiction. State and local jurisdictions will now exclusively regulate these wetlands. Massachusetts already has comprehensive state and local regulations over wetlands, so the effect is likely more limited in the Commonwealth.

There are two areas, however, where the agencies may not have gone far enough in implementing Sackett’s requirements. First, the new definition of “adjacent” lacks any geographic proximity between a wetland and a covered water. The prior definition required that a wetland be “bordering, contiguous, or neighboring.” The agencies removed these geographic limitations and now assert jurisdiction over any wetland with a continuous surface connection to a covered water, even if not “adjacent” to the covered water in any way. This seemingly belies the Supreme Court’s requirement that the wetland be “indistinguishably part of a body of water that itself constitutes ‘waters’ under the CWA.” In other words, Sackett requires that a wetland be so close to the covered water that it is indistinguishable, both in terms of physical proximity and a continuous surface connection. In choosing to adopt only the latter part of the requirement, the agencies have drafted their “conforming rule” in a manner that would enable them to assert jurisdiction over wetlands miles or more from a covered water, as long as there’s some sort of hydrologic surface connection. This is likely not what the Supreme Court intended.

Second, the agencies continue to assert jurisdiction over intrastate ponds. This is despite Sackett’s instruction, citing Solid Waste Agency of Northern Cook Cty. v. Army Corps (2001), that the CWA “does not cover isolated ponds” or “ponds that are not adjacent to open water.”

Like other commenters, we expect the new rule will soon be litigated, and many industry groups have indicated their intent to do so. It may be some time before there is true clarity on the outer reaches of CWA jurisdiction.

[1] For more detail on Sackett, see our May 2023 alert summarizing the decision.

This advisory was prepared by Matthew Connolly, Sarah Turano-Flores, Michael Leon, and Matthew Snell in Nutter’s Real Estate Department.  If you would like additional information, please contact any member of our Real Estate Department or your Nutter attorney at 617.439.2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.