Big wins elusive for EPA in Clean Water Act showdowns

For U.S. EPA at the Supreme Court, it's been the best of times -- and the worst.

In Clean Air Act cases, EPA is on a roll. The high court last term upheld a major EPA program for air pollution that drifts across state lines. It also barely trimmed a permitting program for greenhouse gases, leaving intact most of EPA's first round of climate regulations.

And even when EPA has technically lost, as in the landmark 2007 Massachusetts v. EPA climate case, the justices ruled for the more environmentally protective side -- in that case, that EPA is empowered to regulate greenhouse gases.

But it's a different story when the Clean Water Act is in play. The agency hasn't won a case broadening its regulatory authority since 1985.

There have been nine water cases at the high court, with seven hinging on EPA or Army Corps of Engineers policies. The agencies have technically won in five cases, with four seen as opposed to greater environmental protections, such as the 2013 ruling upholding EPA's position that discharges from logging roads don't require permits.


The big 1985 win -- United States v. Riverside Bayview Homes -- was a unanimous ruling in a Michigan permitting case that bolstered federal power over interstate wetlands. But the impact of that ruling has since been blunted by other Supreme Court wetlands cases.

The agency's record in water cases looms large as EPA works to finalize its "waters of the United States" proposal, which aims to clarify which streams, bogs, swamps and marshes fall within the agency's regulatory jurisdiction under the Clean Water Act.

EPA has said it will finalize the regulations in the next year in what would be one of President Obama's landmark environmental rules.

With the stakes high, lawyers are already talking about legal assaults on the proposed regulations.

The new EPA Clean Water Act rule proposal comes after two recent Supreme Court cases limited federal jurisdiction over wetlands and waterways, including the confusing 2006 decision in Rapanos v. United States.

Rapanos broke down along familiar lines -- four conservatives ruled against the agency's jurisdiction, while four liberals upheld it -- and Justice Anthony Kennedy, the court's usual swing voter, tried to strike a balance.

But Kennedy provided little help for EPA. He failed to define clearly which bodies of water qualify for federal oversight, spurring jokes by environmentalists that a navigable water is whatever Kennedy thinks it is.

The Rapanos ruling highlights several reasons EPA has struggled in water cases but thrived under the Clean Air Act, including the water law's vague, undefined terms and property rights aspects that are easier for the justices to grasp than esoteric air pollution metrics.

And Kennedy set up a new criterion for EPA in which a wetland or isolated stream must have a "significant nexus" to a traditional navigable body in order to qualify for the act's protections.

How well EPA parses Kennedy's reasoning could determine the fate of its new proposal, should a challenge make its way to the high court in three or four years, and should Kennedy -- who is 78 years old -- still be on the bench at that time.

"All of this debate over the waters of the United States rule and the anticipated litigation is going to be about what did one justice on the Supreme Court mean when he defined 'significant nexus,'" said Thomas Lorenzen, a former environmental lawyer at the Department of Justice who is now practicing at Dorsey & Whitney, referring to language in Kennedy's opinion.

"Everyone is trying to guess what Justice Kennedy meant, and it's not necessarily connected to statutory language."

Water law 'doesn't tell you very much'

Rapanos centered on whether filling in Michigan wetlands required a Clean Water Act permit because they qualified as navigable under the law. Kennedy disagreed with both the conservatives and liberals, but ultimately ruled against EPA.

Kennedy acknowledged that the law was vague, but he didn't define "navigable."

"Congress' choice of words creates difficulties, for the Act contemplates regulation of certain 'navigable waters' that are not in fact navigable," Kennedy wrote. "Nevertheless, the word 'navigable' in the Act must be given some effect."

The opinion highlighted the first problem in Clean Water Act litigation for EPA -- the law itself -- said Richard Schwartz, a veteran environmental attorney at Crowell & Moring.

The act "doesn't tell you very much," he said. "It refers to navigable waters and defines them as waters of the United States. But there are so many possible variations of facts, and the Clean Water Act says so little that there is just so much room for disputes."

And unlike the water law, Lorenzen added, the Clean Air Act provides clear definitions of important terms like "public health" and "welfare," which are critical for justifying air rules.

The Clean Water Act also isn't as complex as the air law, making air cases harder for judges to fully comprehend in the short time they have to decide a case. In those instances, they are more likely to accept EPA's expertise and legal argument.

"That makes it quite difficult for courts to feel confident when they adjudicate," said Tim Bishop of Mayer Brown, who has argued multiple water cases at the Supreme Court.

Consequently, he added, "the courts are giving a fair amount of leeway to the Clean Air Act these days."

That was apparent last term, when the court upheld EPA's Cross-State Air Pollution Rule, or CSAPR. The regulation applies to 28 Eastern states, requiring upwind states to cut emissions that contribute to downwind states exceeding air standards.

CSAPR is the definition of a complex regulatory regime. Some states, for example, may contribute more to pollution in a state they don't neighbor than one they do. Others may be both upwind and downwind states.

In deciding the case, the Supreme Court opted not to wade into the program's technical aspects and deferred to EPA's consideration of costs in deciding how much states must cut emissions (Greenwire, April 29).

The case illustrated the type of high-profile issue the Supreme Court likes to take on, Bishop said, as well as the complexities of air regulations.

"These are sexy, exciting issues, and you can see why the court wants to get in there," he said. "But once it gets a full record in front of it and starts looking at what the opinion would look like, there is a fear on the court that this is not the time to tie the agency's hands too tightly."

Picking sympathetic plaintiffs

Another major hurdle for EPA in the jurisdictional water cases has been the nature of the challenges.

In the air cases, EPA has faced broad facial challenges to its regulations or policies.

The three jurisdictional water cases at the Supreme Court have instead focused on narrow cases involving how the government's policy applies to a specific body of water or wetland. All three -- Solid Waste Agency of Northern Cook County v. Army Corps of Engineers (or SWANCC), United States v. Riverside Bayview Homes and Rapanos -- have focused on federal jurisdiction of small, isolated wetlands.

But while those specific wetland tracts may appear inconsequential, the outcomes of the cases have affected the entire regulatory reach of the Clean Water Act.

In those and other Supreme Court water cases, including those involving enforcement, EPA typically faces facts and circumstances that are stacked against it. That's no accident.

James Banks, former head of the Natural Resources Defense Council's water program, who is now in private practice, said lawyers purposely seek out the best plaintiffs in the water law challenges.

"Many of these cases were chosen by lawyers to make a precedent and change the law or the agency's direction," said Banks, who now represents clients including the American Farm Bureau at Hogan Lovells. "They show up in court with the best facts anyone can find."

In Sackett v. EPA, for example, an Idaho couple trying to build a house on Priest Lake received a compliance order from EPA saying they were violating the Clean Water Act by filling in wetlands on the property.

They sought to challenge the order in court, claiming that their land wasn't a wetland. EPA countered that such orders are not judicially reviewable until a formal enforcement action begins. The agency has historically relied on compliance orders -- which carry a fine of up to $37,500 per day -- to encourage landowners to quickly come into compliance.

Lower courts sided with EPA, but the Supreme Court unanimously lined upwith the Sacketts, ruling that they may challenge EPA's reasoning for the order in court. The ruling called into question EPA's practice of issuing compliance orders to enforce its policies (Greenwire, March 21, 2012).

Sackett also illustrated how property rights issues are a common thread in water cases, while they are virtually absent from air litigation.

Unlike air cases, water cases often hinge on the federal government placing at times onerous and expensive requirements or restrictions on how an individual may use his or her property.

Bishop said property rights are a typically "huge part" of water cases, and that helps makes them more approachable for judges.

"Those are things you can really grasp," he said.

Big EPA wins in lower courts

While it has struggled at the Supreme Court in water cases, EPA has scored major victories in federal appellate courts, said Vermont Law School professor Pat Parenteau.

"EPA's record on water, in terms of industry challenges, is outstanding," he said. "It's every bit as good as on the air act."

Perhaps the most important is the Richmond, Va.-based 4th U.S. Circuit Court of Appeals' 2003 decision in United States v. Deaton, a ruling that came down after SWANCC and also addressed the jurisdictional issue.

The case hinged on whether discharges into a roadside ditch on the Delmarva Peninsula were covered by the Clean Water Act because, despite being miles from the Chesapeake Bay, it eventually drained into the Wicomico River.

A real estate developer challenged EPA and the Army Corps' jurisdiction over the ditch, but the 4th Circuit upheld it. In so doing, the unanimous three-judge panel interpreted SWANCC narrowly and said the government's 1974 waters of the United States regulations "fit comforably within Congress's authority to regulate navigable waters."

"The regulation, as the Corps reads it, reflects a reasonable interpretation of the Clean Water Act," the court ruled, adding that the law grants jurisdiction over a river's "whole tributary system."

The real estate developer appealed the 4th Circuit's decision to the Supreme Court, which declined to review it.

Parenteau contends that because of the strange vote breakdown -- 4-1-4 -- and various different criteria in Rapanos, the Deaton ruling is the proper holding under which to consider EPA's latest proposal. He also said the scope of EPA's Clean Water Act jurisdiction put forth by the court in Deaton is more expansive than the agency's new proposal.

"It is the base line that should be used to judge EPA's proposed rule," he said. "There was no majority opinion in Rapanos and hence no binding precedent."

Moreover, EPA has also recently fared well at the U.S. Court of Appeals for the District of Columbia Circuit. In the last two years, it has sided with EPA in two industry challenges involving mountaintop-removal coal mining.

The court in April 2013 upheld EPA's retroactive veto of a large West Virginia mining project roughly four years after it was issued by the Army Corps. It was one of the first times EPA had exercised that authority under the Clean Water Act (Greenwire, April 23, 2013).

And in July, the D.C. Circuit upheld two restrictive EPA policies issued shortly after Obama took office that addressed water pollution from mountaintop-removal coal mining (Greenwire, July 11).

In both cases, the D.C. Circuit largely deferred to EPA's interpretation of the law.

But those rulings also highlight another reason EPA has historically fared poorly in Clean Water Act cases: the courts in which they are heard.

The Clean Air Act gives the D.C. Circuit jurisdiction over most lawsuits. But the Clean Water Act allows challengers to file in any circuit.

And other circuits, said Hogan Lovells' Banks, are often less likely to side with the agency.

"You don't get outside the Beltway very often," Banks said of air cases. "The D.C. Circuit ... is more likely to grant deference to the agency than many other circuits."

At the appellate level, the chances for EPA's waters of the United States rule -- once it's finalized -- could be shaped by which circuit hears the case. If several challenges are filed in multiple circuits, which is likely, the circuit that hears the consolidated case is determined by a lottery.

In that scenario, EPA would likely prefer arguments in the San Francisco-based 9th U.S. Circuit Court of Appeals, which is generally friendly to the agency. It would like to avoid others, including the St. Louis-based 8th Circuit, which has historically been more hostile.

Where the case is tried also has important ramifications for the Supreme Court.

"Which court it lands in could have a profound effect on how much deference EPA gets and how the case is framed as it goes to the Supreme Court," said Lorenzen, the former DOJ attorney.

Chief Justice Roberts offers 'generous leeway'

While Kennedy's Rapanos opinion and its "significant nexus" test are sure to play major roles in any legal challenge to EPA's waters of the United States rule, the agency's supporters point to another part of that decision that typically gets less attention.

In a short concurrence, Chief Justice John Roberts all but dared EPA to craft the type of rule it has recently proposed.

He said EPA didn't issue a jurisdictional rule after the court's 2001 ruling in Solid Waste Agency of Northern Cook County v. Army Corps.

If it had, Roberts wrote, EPA would have gotten "generous leeway" from the 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."

Jon Devine of the Natural Resources Defense Council said EPA seems to have done just that, and it appears to have addressed Kennedy's "significant nexus" test by relying on science underlying hydrological connections to establish its jurisdiction.

"I think it's an open-and-shut case," Devine said. "The agency is going to be entitled to a lot of deference in how they determine what waters need to remain protected."

However, Roberts isn't necessarily beholden to those words if he does find something objectionable in EPA's rule, should a challenge reach his court.

And, nevertheless, most court watchers insist that the agency's focus shouldn't stray from Kennedy.

"As long as the court's makeup doesn't change," Lorenzen said, "this is all going to be a play for Justice Kennedy."

Twitter: @GreenwireJeremy | Email:

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