Following last week's appeals court decision to stay the Obama administration's Waters of the U.S. rule nationwide, what does the legal landscape look like for the rule as it faces multiple court challenges? During today's OnPoint, Larry Liebesman, a senior adviser at Dawson & Associates and a former senior trial attorney in the Department of Justice's Environment Division, discusses the long-term prospects for the water rule.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Larry Liebesman, a senior adviser at Dawson & Associates and a former senior trial attorney in the Department of Justice's environmental division. Larry, thank you for joining me.
Lawrence Liebesman: Pleasure to be here, Monica.
Monica Trauzzi: Larry, a major setback last week for the Obama administration's Waters of the U.S. rule when an appeals court issued a stay on the rule nationwide. Let's sort of unpack the decision a little bit and what's behind it. What was the court's reasoning for the stay?
Lawrence Liebesman: Well, the court's reasoning is that they looked at the different interests at stake and the standards for issuing a stay and sort of balanced the equities and said there's so much litigation, so much uncertainty over the issues of jurisdiction, the scope of the rule, and they also found some problems with the merits and said that they had concerns about the record supporting these limitations that were built into the rule. So what they -- the way I read the opinion is they just went down, balanced the equities and said to go back to the status quo pre-rule makes sense right now because nobody's going to get unreasonably harmed if the rule is stayed right now while things get sorted out. So I thought it was sort of a fair, equitable decision, although making certain findings on the merits which suggest potentially that if the Court of Appeals in the 6th Circuit has the case, that they -- that may send a message that they have real concerns about the merits of the rule itself, you know, so that's the way I unpackage it is status quo, let's ... get the record, let's sort out the jurisdictional issues and then go from there.
Monica Trauzzi: What potentially has implications?
Lawrence Liebesman: Potential -- there's real implications because when the ... granted the stay, is there a probability of success on the merits? And that was the first factor that the court addressed and looked at the limitations and said we have concerns about the lack of a record that we see here in support of the geographic limitations on jurisdiction in the rule. And they also had concerns about the process and said that the -- there was really not adequate notice and comment on these geographic limits, the 4,000 linear feet issue, for example. And so they -- that suggests that they have concerns, but in my experience as a trial lawyer, because of the probability suggests on the merits, that does not necessarily mean ultimately that they will come out that way on the merits if they have jurisdiction, which is yet to be sorted out.
Monica Trauzzi: Was the nationwide stay expected?
Lawrence Liebesman: I was a little surprised, frankly, because I thought that the jurisdictional issue would be sorted out first. Indeed, the dissenting judge had a concern about going to the merits until the jurisdictional issue is sorted out. Apparently that's being briefed right now in the 6th Circuit. At some point in the reasonably near future is going to have to decide whether jurisdiction is in the Court of Appeals or should be in the various district courts around the country. And so I was, frankly, a little surprised that it came down in that -- at this stage.
Monica Trauzzi: And who do you think has jurisdiction?
Lawrence Liebesman: I personally, after looking at it and thinking about the law, I think that it should be in the district court, and the reason why I believe that is that the language for judicial review in the courts of appeal is very limited. It's not anything that EPA does, and so there's language about effluent limitations or other limitations, and so it's hard to believe that a definition rule here, which is what this is, it defines the limits of jurisdiction, meets the definition of an effluent or other limitation, which typically has been standards. For example, EPA issues standards of performance on effluent for particular industries. That is what the courts of appeals typically get into. Now, there's contrary law in the 6th Circuit that looked at pesticide regulation that was issued -- pesticide permit program, and a permit itself and said we have jurisdiction, but I think that's distinguishable.
Monica Trauzzi: In addition to last week's ruling, this week a panel ruled against consolidating the current nine cases that are in play challenging the rule. Why is this significant, and what are you sort of expecting the legal landscape to look like?
Lawrence Liebesman: Well, it's a quagmire, to say the least. I think what this says is that the district court panel that was considering whether to consolidate everything in the federal District Court for D.C., which a lot of times hears these rulemakings, looked at all the arguments and concluded that it didn't meet the standards because some of the issues are legal, and they felt it would be more appropriate to have all the district courts, seven of them, you know, determine -- review this rule on parallel proceedings, that that does not in any way create a major problem in their mind. And so what I see happening in the legal landscape is you're probably going to see, first of all, a determination of jurisdiction. That's going to be a threshold issue. If, as I think they should, the decision is that the district courts have jurisdiction, you're going to see the seven district courts around the country having to adjudicate the validity of the rule. And so they're all going to be having these various reviewing the administrative record and the legal issues involved and trying to come up with a final determination. Now, whether one court would defer until another court rules or hold things up, well, you know, doesn't -- it's not clear. The North Dakota District Court, as you know, seems to be ahead of the curve because they issued a preliminary injunction. So they got in -- somewhat into the merits. The other district courts haven't ruled on preliminary injunctions, so one open question is will the other courts defer to the North Dakota court that seems to have a sort of head start, you might say, in reviewing the case. That's an open question. On the other hand, would they say, no, we're going to plow ahead, and if there are different rulings and they go to the courts of appeals and there are different appellate rulings, then maybe the Supreme Court needs to get involved again. And so there are a lot of unknowns. It is definitely a -- uncharted waters.
Monica Trauzzi: You were telling me before the show that this is unique and very different from anything that you've seen before. How so?
Lawrence Liebesman: Well, yeah. And I spent 11 years at the Department of Justice in the Environment Division, the same division and section that is defending this rule. And a lot of times in some of the cases I was involved in, EPA and the court would be co-defendants, and there'd be differences of opinion. And at times, they'd be at odds with each other, but typically they -- things would be worked out before a final decision is made and, you know, as a Justice Department lawyer, you're supposed to represent the United States. So when that was resolved, typically we'd get up and threw our sort of disagreements, so-called warts on the record, you could explain them as part of an ongoing process. What I find here so interesting is that, you know, the Corps of Engineers, in a series of memos, went on the record and disagreed strongly with EPA's interpretation, distance limits, even the basic data that was gathered, which they said the court didn't even have a chance to review and analyze. That gives them real concern. They even said they wanted the corps' name taken off of the final rule, which, you know, ultimately didn't happen, but still it's -- take a position like that on the record in a series of memos is, in my experience, highly unusual.
Monica Trauzzi: And Greenwire's Annie Snider had some great reporting breaking that story. Long term, is this generally all that's happening right now bad news for the future of Waters of the U.S.?
Lawrence Liebesman: I think it's -- it raises a lot of confusion. It exacerbates the confusion because the regulator community out there -- and when I say regulator community, I'm not only talking about industry, I'm talking about public agencies, water agencies, public works agencies -- depend on some certainty and predictability, and so this creates confusion as to whether this rule will ultimately be upheld. Are we going to be back to the -- for a long time to the original guidance, and so certainly predictability is important, although in my opinion, I think that the rule went too far, and I think the significant nexus test as interpreted by Justice Kennedy, in my professional view, does not support the rule as promulgated, but the bottom line is I think that it does -- it's going to be -- create significant uncertainty moving forward, and it's only a matter of time to see what happens.
Monica Trauzzi: This will be very interesting to watch. Thank you for your time. Thank you for coming on the show.
Lawrence Liebesman: Thank you, Monica. It's been a pleasure.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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