On August 27, 2015, Chief Judge Ralph Erickson of the U.S. District Court for the District of North Dakota granted a preliminary injunction that stops EPA’s and the Army Corps of Engineers’ new rule defining federal jurisdiction under the Clean Water Act from going into effect in 13 states. North Dakota v. U.S. Environmental Protection Agency, 3:15-cv-00059 (D.N.D. Aug. 27, 2015) (order granting preliminary injunction). This decision came just one day before the final rule was scheduled to become effective. As a result, the agencies are prevented from implementing the final rule in Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota and Wyoming. The final rule went into effect on August 28, 2015 in all other states.
Background
EPA and the Corps jointly published a controversial final rule defining “waters of the United States,” on May 27, 2015. The rule is critically important because it establishes which water bodies are subject to federal jurisdiction under the Clean Water Act. Since it was finalized, numerous challenges have been filed against the new rule in federal district and circuit courts. The U.S. Judicial Panel on Multidistrict Litigation has consolidated the circuit court cases in the U.S. Court of Appeals for Sixth Circuit. In addition, EPA and the Corps have asked the Judicial Panel to consider consolidating the 10 district court cases filed across the country. While the Judicial Panel’s decision on the district court cases is pending, several of the district courts have granted the government’s various motions to stay the pending cases, and district courts in West Virginia and Georgia found they lack jurisdiction over cases challenging the rule. Murray Energy Corporation v. U.S. Environmental Protection Agency, No. 1:15CV1 10 (N.D. W. Va. Aug. 26, 2015) (order granting motion to dismiss); Georgia v. U.S. Environmental Protection Agency, cv 215-79 (N.D. Ga. August 27, 2015) (order denying preliminary injunction).
One of these district court cases was filed in the District of North Dakota by 13 states—North Dakota, Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, two New Mexico state agencies, South Dakota and Wyoming. These states allege the final rule unlawfully expands the jurisdiction of EPA and the Corps beyond the scope of their statutory authority. After the court denied the agencies’ motion for a stay, the states filed a motion for a preliminary injunction with the goal of halting the implementation of the final rule, which is scheduled to go into effect on August 28, 2015.
The Decision
Judge Erickson first rejected the agencies’ argument that the Sixth Circuit has exclusive jurisdiction over any lawsuit challenging the final rule. The Clean Water Act grants original jurisdiction to the federal circuit courts over certain challenges to regulatory actions. Relying on the plain language of the statute and recent case law, the court concluded that a challenge to a jurisdictional rule is not a type of action over which the federal courts of appeals have original jurisdiction.
Next, the court found that the likelihood of success on the merits, irreparable harm, balance of these harms and the effect on public interest all weighed in favor of granting the states injunctive relief. Noting the final rule was “exceptionally expansive,” the court ruled the states are likely to succeed on the merits for two reasons. First, the court found the agencies likely exceeded their authority in promulgating the final rule because it did not meet the significant nexus standard set forth in Justice Anthony Kennedy’s concurring opinion in Rapanos v. United States. 547 U.S. 715 (2006). The court reasoned the definition of tributary in the final rule would include numerous waters with no significant nexus to any downstream navigable water. Second, the court found the final rule likely is arbitrary and capricious (and therefore likely violates the Administrative Procedure Act) because it asserts jurisdiction over “remote and intermittent waters” without any evidence that these waters have a significant nexus to downstream navigable waters. Notably, the court cited the Army Corps’ own observation that the rule “arbitrarily” establishes a geographical limitation for determining jurisdiction. Slip op. at 13.
The states also persuaded the court that they would face irreparable harm if the final rule went into effect. The court pointed to the increase in waters that would fall under federal permitting authority. The court found states would be harmed by the loss of power and money associated with losing control over these traditionally state-controlled waters. On balance, the court decided the irreparable harm faced by the states was greater than any harm to the agencies that would be caused by a delay in the rule’s implementation. Lastly, the court explained that it was in the public interest to grant the injunction, in order to “ensure that federal agencies do not extend their power beyond the express delegation from Congress.” Slip op. at 18.
Implications
The immediate result of this decision is that the final rule is blocked from implementation in the 13 states participating in this litigation—in those states, the current definition of “waters of the United States” will remain in effect. In states that did not join this suit, the final rule went into effect on August 28, 2015. More broadly, this decision may be indicative of how other courts might rule when faced with the ultimate question of the final rule’s validity. In the interim, this ruling adds to the regulatory uncertainty that will endure while the various challenges to the final rule wind their way through the courts.
