Before finalizing its rule defining which streams and wetlands qualify for federal protection last month, U.S. EPA and the Army Corps of Engineers considered more than 1 million public comments.
But the opinion that mattered most to them didn’t come from a stakeholder. It came from one Supreme Court justice nine years ago.
In 2006, Justice Anthony Kennedy, the high court’s usual swing vote, penned a stand-alone opinion in a case on the scope of Clean Water Act jurisdiction that fundamentally altered how the nation’s foremost water law has been implemented on the ground.
In that case, Rapanos v. United States, the court’s four conservatives ruled for limited federal power reaching only "navigable waters" and the relatively permanent streams and wetlands connected to them. The court’s four liberal members argued for a much more expansive view of what bodies the Clean Water Act was meant to cover, including most wetlands.
That left Kennedy in the middle. He ultimately sided with the conservatives but set his own criteria for when a stream or wetland warrants federal protection. At the heart of his approach is the notion that waters must have a "significant nexus" to navigable rivers and seas in order to qualify for federal protection.
Now, after years trying to implement Kennedy’s rationale in a case-by-case approach on the ground — with federal regulators literally trudging through fields to examine small, individual wetlands to determine whether they have a significant nexus and warrant protection — the new rule sets the types of streams and wetlands that the agencies say categorically meet Kennedy’s test and should be counted in automatically under the Clean Water Act.
But with a host of states, industry groups and maybe even environmentalists ready to file lawsuits all across the country as soon as the rule is published in the Federal Register, the agencies know it is only a matter of time before the issue ends up back before the court, if Congress doesn’t kill it first.
With this in mind, EPA and the Army Corps appear to have done everything they can to satisfy Kennedy.
"This rule is written squarely to capture Kennedy’s vote," said Pat Parenteau, a University of Vermont Law School professor who supports the rule. "He’s the swing vote."
The agencies don’t have a great track record on water cases, especially at the Supreme Court.
They won the 1985 case United States v. Riverside Bayview Homes, in which the high court sided with the Army Corps of Engineers’ determination that the scope of the law extends to wetlands that are adjacent to navigable waters.
But they lost two subsequent decisions — Solid Waste Agency of Northern Cook County v. Army Corps in 2001 and the 2006 Rapanos case — with the high court saying there are limits to federal jurisdiction. The vague and confusing decisions, though, left both regulators and industry guessing about where those limits fall.
Now that the Obama administration has tried to answer that question, lawyers on all sides are gearing up for what stands to be the next major court battles over the 1972 water law.
In his opinion to Rapanos — a case concerning whether a Michigan developer needed a Clean Water Act permit to fill in wetlands on his property that weren’t closely connected to a navigable water — Kennedy laid out the conundrum of the Clean Water Act.
The language of the law covers "navigable waters," but Kennedy and all of his colleagues agreed that it must cover more than just waters that can sustain commerce, as the phrase has historically been defined.
Congress’ "choice of words creates difficulties," Kennedy wrote, because the law "contemplates regulation of certain ‘navigable waters’ that are not in fact navigable. Nevertheless, the word ‘navigable’ in the Act must be given some effect."
Kennedy could agree neither with the conservative nor the liberal justices in their takes on the scope of the law in Rapanos.
The conservative opinion, he wrote, would put all waters with a continuous surface connection under federal authority, even if that connection was "the merest trickle." But at the same time, it would leave out waters like those in the West that lie dry most of the year, but host "thundering torrents" at times.
The liberals’ opinion, on the other hand, would ignore "navigable" in the law, Kennedy argued, and would allow federal regulation of wetlands "alongside a ditch or drain, however remote and insubstantial, that eventually may flow into a traditionally navigable water."
The "significant nexus" test was Kennedy’s answer to this conundrum, requiring that a marsh, wetland, bog or swamp have more than a "speculative or insubstantial" effect on water quality in order to warrant federal protection.
EPA has made Kennedy’s test the linchpin of its new rule, using the phrase more than 450 times in the 299-page preamble to the final rule.
Kennedy’s rationale for extending jurisdiction beyond just navigable waters in part rests on the idea that streams and wetlands are ecologically connected to them. In response, EPA proffered a 408-page science report, a 140-page outside scientific review of that report and a 423-page technical report detailing the connectivity of the waters at issue in the new rule.
To be sure, not everyone agrees that Kennedy’s opinion is the controlling one. Industry groups opposing the rule, including the umbrella Waters Advocacy Coalition, argued in comments to the proposed rule that the agencies should have relied on the common points of agreement between Kennedy and the conservative justices in the rule rather than just on the opinion of a single justice.
But even if Kennedy’s standard is the one to be met, Roger Martella, a former top EPA lawyer and now a partner at Sidley Austin LLP, said the agencies appear to be stretching it in key places.
The prime spot, he argued: their definition of tributary.
"The gamble they’re taking is that he might be willing to expand his interpretation," Martella said.
The definition of tributary is key, he said, because it forms the basis of which nearby wetlands and ponds can also get counted.
The issue was one of great interest for the court in the Rapanos case, consuming the first portion of oral arguments.
At the time, the agencies defined tributaries as anything with an ordinary high-water mark — an indicator of where water normally flows. Kennedy explicitly ruled that definition was too broad, at least for the purposes of determining whether nearby wetlands should be counted in.
It "seems to leave wide room for regulation of drains, ditches, and streams remote from any navigable-in-fact water and carrying only minor water-volumes towards it," he wrote.
In the new rule, the agencies refine that tributary definition to waters that have a streambed, two banks and an ordinary high-water mark. Those features, they argue, are physical indicators that "there is sufficient volume, frequency, and flow" from those tributaries to larger downstream waters "to establish a significant nexus."
But it, too, would rule some ditches and remote streams jurisdictional.
"There was nothing [Kennedy] wrote in Rapanos that endorsed this concept," Martella said of the new definition.
Also apt to draw legal fire is the rule’s approach to which wetlands get counted in because they are "adjacent" to a jurisdictional water.
The new rule covers not just wetlands that are directly abutting a jurisdictional water, but all the ponds and marshes in a covered waterway’s floodplain, within 100 feet of its channel, or within at least 1,500 feet but potentially as much as 4,000 feet of its high-water line.
Again, the agencies argue that wetlands and ponds meeting this definition meet Kennedy’s significant nexus test. But the definition walks the delicate tightrope of science, expert experience and practical compromise — one that is often legally tricky (Greenwire, May 28).
Then there’s the issue of wetlands that are far from the larger river network.
Until 2001, the agencies claimed broad authority over such waters by arguing that a migratory bird could land in such wetlands, then fly across state lines — thus making it an interstate commerce issue.
The court struck down this so-called Migratory Bird Rule in SWANCC, a case considering whether water-filled mining pits outside Chicago were subject to Clean Water Act protection. And although the agencies argued they could still claim federal authority over such wetlands through other routes, in practice this category of waters has largely been outside federal reach for the past decade and a half.
This has been a point of great concern for conservation groups, which point out that entire regions of ecologically important wetlands, like the Dakotas’ prairie potholes, fall into this category of so-called isolated waters. They had pushed the administration to include automatic coverage for these types of wetlands in their new rule.
The final version of the rule doesn’t go that far — EPA water chief Ken Kopocis said that the agency didn’t feel it had the scientific grounding to do so — but it does lay a foundation that makes it easier for some such wetlands to get counted in.
Specifically, the rule names five types of wetlands — prairie potholes, California vernal pools, Delmarva and Carolina bays, pocosins, and Texas coastal prairie wetlands — that are to receive case-by-case significant nexus tests. And in doing these tests, the rule requires that regulators consider not just the importance of the individual water at hand, but the importance of the entire system of similar waters that it is part of (Greenwire, June 1).
Kennedy himself opened the door to this concept of "aggregation" in his Rapanos opinion.
Wetlands meet his significant nexus test, he wrote, "if the wetlands, either alone or in combination with similarly situated lands in the region significantly affect" the integrity of downstream waters.
The concept, however, has been one of the most controversial. Critics argue that it is simply a way of making things that aren’t important seem so. Industry opponents successfully got the approach stripped from the Bush administration’s 2007 guidance document (Greenwire, April 18, 2012).
Indeed, this concept of aggregation undergirds not just the new rule’s approach to isolated wetlands, but also its rationale for counting in all tributaries and adjacent waters.
That’s likely to be a ripe issue for legal challenges. The Waters Advocacy Coalition has long argued, as it did in its comments to the proposed rule, that if aggregation is to be used, it can only be used with respect to wetlands.
"In his concurring opinion, Justice Kennedy adopted this language as the standard for determining whether wetlands adjacent to nonnavigable tributaries are jurisdictional," the group wrote. "It is clear from his language that wetlands were the sole focus of his inquiry."
‘Generous leeway’ for agencies?
Once EPA publishes the rule in the Federal Register, the lawsuits will be filed quickly, and across the country.
Oklahoma’s attorney general, Scott Pruitt, is one of the state leaders who has clearly signaled he intends to sue.
"It will be very quickly, but it all hinges back on when it shows up in the Federal Register," his spokesman, Aaron Cooper, said. "We are working on it now, and we are working quickly to put something together, and we will be at the front of the pack in challenging this."
Other environmental laws like the Clean Air Act require such challenges to be filed at the U.S. Court of Appeals for the District of Columbia Circuit. Under the Clean Water Act, however, challenges may be filed in federal district courts across the country. (The Clean Water Act allows direct filing to appeals courts for some types of cases, but those aren’t likely to be among the first filed against the "Waters of the United States" rule.)
So challengers are likely to look for judges and circuits that they feel will be sympathetic to their position. If there are multiple cases on a single issue, they may be consolidated. And if those cases reach the appellate level, there will be a lottery for what circuit court will hear the case.
That lottery could be critical for EPA. If the case lands in a more liberal circuit like the San Francisco-based 9th, it would likely help the agency. But if it falls into the more conservative 5th Circuit, based in New Orleans, or the St. Louis-based 8th Circuit, EPA could face more skeptical judges. The entire process will likely play out over several years.
Industry lawyers were reluctant to reveal their strategies, but some challenges appear certain.
First, there is likely to be a broad, or "facial," challenge to the rule. Such a case would raise constitutional questions similar to those in the Rapanos and SWANCC decisions, and many will likely try to use those precedents to their advantage. Chief among them: whether EPA under the Commerce Clause can regulate a body of water that lies entirely within one state and has minimal effect on interstate commerce.
Jonathan Adler, an environmental law professor at Case Western Reserve University School of Law who has written extensively on the issue, said the previous Supreme Court cases show a "concern about the constitutional limits on federal regulatory authority."
"The Commerce Clause reaches things that have a substantial effect on interstate commerce," he said. "It’s not clear that a blanket assertion of authority over all lands or waters that have certain hydrological characteristics necessary fits with that limits."
Otherwise, there are likely to be countless challenges to specific bodies of water — tributaries, wetlands, etc. — that EPA says fall within federal jurisdiction. These cases and others may be filed under the Administrative Procedure Act, as challengers will try to show the rule is somehow "arbitrary and capricious."
The lawsuits may not all come from those arguing that the new rule is too broad.
At least two environmental groups — the Waterkeeper Alliance and Center for Biological Diversity — have come out against the regulation because they say it isn’t protective enough.
"We believe it weakens jurisdiction beyond what is supported by the science and the law, and particularly jurisdiction over tributaries," said Waterkeeper Alliance senior attorney Kelly Foster, although she would not comment on whether a lawsuit was in the works.
In any legal challenges, EPA will be hoping courts grant its reading of the law and the regulation deference.
Courts are required under the landmark 1984 Supreme Court ruling in Chevron USA Inc. v. Natural Resources Defense Council to defer to an agency if the language of the law is ambiguous. And if one thing is certain from the previous Supreme Court cases, the Clean Water Act’s language is far from clear.
Moreover, there is some indication that even the Supreme Court’s conservative wing may concede to EPA’s interpretation.
In his opinion in Rapanos, Chief Justice John Roberts all but dared EPA to craft the type of rule it recently finalized.
He criticized EPA and the Army Corps for not crafting a jurisdictional rule following the 2001 SWANCC decision.
If it had, Roberts wrote, EPA would have gotten "generous leeway" from the Supreme Court.
"Given the broad, somewhat ambiguous, but nonetheless clearly limiting terms Congress employed in the Clean Water Act," Roberts wrote, "the Corps and the EPA would have enjoyed plenty of room to operate in developing some notion of an outer bound to the reach of their authority."