The Court’s decision has prompted the US Army Corps of Engineers to freeze jurisdictional determinations for permitted activities pending additional guidance.

On May 25, 2023, by a narrow 5-4 majority, the US Supreme Court ruled in Sackett v. EPA that the Clean Water Act (CWA) only extends to wetlands that have a “continuous surface connection” with “waters of the United States” (WOTUS) — the term in the CWA’s definition of “navigable waters” that determines the jurisdiction of the US Army Corps of Engineers (the Corps) and the Environmental Protection Agency (EPA) (together, the Agencies) over projects and other activities requiring permits to dredge, fill, or discharge into federally protected waters.[1]

The immediate practical effect of the Court’s decision has been to prompt the Corps to pause its process for issuing final, approved CWA jurisdictional determinations[2] until the Agencies determine next steps.[3] In the near term, the Agencies may issue informal guidance to ensure that CWA permitting decisions are consistent with the Court’s decision. However, the Agencies may take months to issue formal guidance to support new approved jurisdictional determinations.[4]

In the medium term, EPA will likely develop a new WOTUS rulemaking to once again redefine the scope of waters protected under the CWA, taking Sackett into account. However, it could take EPA until well into 2024 to issue a new rule, and any such rule would almost certainly be litigated. Additionally, the Court’s May 1, 2023, decision to hear a case challenging the Chevron doctrine and agency discretion to interpret statutory language could also affect litigation over future WOTUS rulemakings. And a change in presidential administration could create further uncertainty if a new administration were to disagree with the degree of restrictiveness in interpreting Sackett in a new WOTUS rule issued by the current administration.

In the longer term, barring changes to the CWA by Congress, the Agencies’ authority under the CWA unquestionably has been significantly curtailed. However, numerous projects and other development activities dependent on CWA permits will likely still be subject to a high degree of uncertainty, particularly those in close proximity to wetlands.

This blog post reviews the Court’s opinion and examines the implications for CWA regulation, litigation, and permitting activities in the months and years ahead.

Majority Opinion

Justice Alito’s opinion for the Court holds that the CWA only regulates wetlands with a “continuous surface connection” to other “traditional” waters of the United States. The opinion takes several analytical steps to reach that holding, relying on Justice Scalia’s four-Justice plurality opinion in Rapanos v. United States in 2006.[5] The Court also rejects the “significant nexus” test for determining whether waters or wetlands are WOTUS,[6] which was first articulated by Justice Kennedy’s concurring opinion in Rapanos and which formed the basis of EPA’s most recent WOTUS rulemaking.

First, the opinion adopts the Rapanos plurality’s conclusion that the term “waters” in the CWA encompasses “only those relatively permanent, standing or continuously flowing bodies of water forming geographic[al] features that are described in ordinary parlance as streams, oceans, rivers, and lakes,” often referred to as “traditional navigable waters.”[7]

Second, although that conclusion “might seem to exclude all wetlands,” the opinion notes that Section 404(g)(1) of the CWA allows states to apply to EPA to administer permit programs regulating discharge of dredged or fill material into certain waters, “except for traditional navigable waters” (the Court’s phrase) and “including wetlands adjacent thereto” (a phrase that appears in the statute).[8] Thus, the opinion reasons, the CWA must have reserved to the Agencies the authority to regulate at least “some” wetlands “adjacent” to “traditional” waters.[9]

Third, the opinion “harmonize[s]” Section 404(g)(1)’s reference to “adjacent” wetlands with the CWA’s definition of WOTUS by concluding that because the adjacent wetlands in Section 404(g)(1) are “includ[ed]” within WOTUS, they must therefore “qualify as [WOTUS] in their own right” — which they can do only on the basis of being “indistinguishably part of a body of water that itself constitutes [WOTUS].”[10] Justice Alito’s use of the term “indistinguishably” echoes the Rapanos plurality’s conclusion that the term “waters” in the CWA “may fairly be read to include only those wetlands that are as a practical matter indistinguishable from waters of the United States, such that it is difficult to determine where the ‘water’ ends and the ‘wetland’ begins.”[11]

Drawing further on Rapanos, the opinion concludes that “indistinguishability” only “occurs when wetlands have a continuous surface connection to bodies that are [WOTUS] in their own right, so that there is no clear demarcation between ‘waters’ and wetlands.”[12] The opinion adds that “[w]etlands that are separate from traditional navigable waters cannot be considered part of those waters, even if they are located nearby.”[13] In other words, the Agencies can only regulate adjacent wetlands that are relatively permanent bodies of water with “continuous surface connections” to traditional navigable waters.

In a single sentence, the opinion “acknowledge[s] that temporary interruptions in surface connection may sometimes occur because of phenomena like low tides or dry spells” (and concedes in a footnote that a landowner cannot avoid jurisdiction by illegally constructing a barrier on otherwise covered wetlands).[14] However, the opinion does not elaborate on how “temporary” an interruption must be to avoid severing the adjacent wetland’s “continuous surface connection” to a traditional navigable water.

Concurring Opinions

Justice Kavanaugh and Justice Kagan argue in concurring opinions that the majority opinion’s “continuous surface connection” test departs from the statutory text of the CWA and functionally reduces the meaning of “adjacent wetland” to “adjoining wetland,” eliminating from jurisdiction “wetlands separated from a covered water only by a man-made dike or barrier, natural river berm, beach dune, or the like” — a change that “will leave some long-regulated adjacent wetlands no longer covered by the Clean Water Act, with significant repercussions for water quality and flood control throughout the United States.”[15] Justice Kavanaugh also states that the “continuous surface connection” test is “sufficiently novel and vague (at least as a standalone test) that it may create regulatory uncertainty for the Federal Government, the states, and regulated parties.”[16]

Implications

Indeed, “regulatory uncertainty” over the precise definition of WOTUS is likely to remain for the foreseeable future. The majority opinion leaves several critical questions unanswered.

First, as noted above, EPA will need to develop a new proposed rulemaking to further revise the regulatory definition of WOTUS in line with Sackett. In particular, a new WOTUS rule will have to pinpoint the boundaries of CWA jurisdiction occupying the space between the Court’s phrases “continuous surface connection” and “temporary interruptions in surface connection.” In doing so, EPA will still need to adhere to the statute, while taking into consideration issues like geography, hydrology, and administrability, potentially including what methodologies may be used to determine the presence of a “continuous surface connection” or lack thereof. The Court’s statement that a “temporary interruption” could include “phenomena like low tides or dry spells” is also far from definitive; the term “dry spell,” for example, may be contingent on regional variations in climate and hydrology. Other “phenomena” constituting “temporary interruptions” may need to be identified and considered.

Additionally, the majority opinion concedes that deliberate obstructions cannot bar regulation of otherwise jurisdictional wetlands, but does not speak to other changes that the concurring Justices caution “will matter a great deal in the real world” and could raise “a host of thorny questions.”[17] For example, storms, floods, or erosion events may shift or breach natural river berms, which could separate waters that previously shared a continuous surface connection, or cause previously separated waters to become connected. Illegal obstructions cannot eliminate coverage, but the status of waters with “barriers authorized by the Army Corps at a time when it would not have known that the barrier would cut off federal authority”[18] is now unclear. Another significant issue is whether a ditch, swale, pipe, or culvert could establish a “continuous surface connection”; many projects exhibit these features, which can lead to difficult jurisdictional determinations in close cases. These are the types of ambiguities that EPA will likely need to take public comment on and address in a new rulemaking.

Any new EPA rulemaking will likely be challenged in court, and the litigation risk to a new WOTUS rule is likely to increase the more the agency tries to fill in the gaps in the Court’s own line-drawing, for two reasons. First, in a functional sense, interpreting the Court’s narrow wording based on technical and scientific criteria risks adopting, or seeming to adopt, the type of case-specific, complex line-drawing in the “significant nexus” test that the Court has rejected.[19] Second, opponents to any revised WOTUS definition that strays from a maximally restrictive interpretation of the “continuous surface connection” test will likely try to leverage language in the majority opinion stating that the Court “require[s] Congress to enact exceedingly clear language” authorizing changes to “[r]egulation of land and water use” that may “impinge” on “traditional state authority.”[20] Although not quite as sweeping as the “major questions” doctrine the Court adopted last term in West Virginia v. EPA,[21] this language is in keeping with the same skepticism about deferring to agencies and likely signals that EPA departures from the majority opinion’s view of the CWA’s text would be reviewed accordingly.

In any event, EPA will likely require significant time to rescind or revise its 2023 WOTUS rule, which was substantially based on the “significant nexus” test articulated in Rapanos. As of this writing, EPA and the Corps have stated that “the agencies will interpret the phrase [WOTUS] consistent with the Supreme Court’s decision” and will “continue to review [the decision] to determine next steps.”[22] Until the Agencies release additional guidance implementing Sackett, in light of previous litigation, the country remains subject to a WOTUS patchwork, with the 2023 WOTUS rule in effect (for now) in 23 states, and EPA interpreting WOTUS in another 24 states consistent with the pre-2015 WOTUS regulatory regime.[23]

In the interim, projects and other activities that were anticipating approved jurisdictional determinations and CWA permits to move forward could be subject to significant delays and uncertainty. That uncertainty may be relatively reduced for projects that were likely to impact only bodies of water located appreciably well beyond the extent of “adjacent wetlands,” since that term has now been defined in Sackett (e.g., a “neighboring” wetland located thousands of feet away from and that never exhibits a continuous surface flow into a stream, river, or lake). However, any activity approaching a conceivable “continuous surface connection” in some form is not free of risk — including, for example, projects that impact a wetland that “continuously” flows into a stream in the rainy season but exhibits a “temporary interruption” in a “dry spell.” Until the Agencies issue additional guidance, agency determinations, project plans and schedules, and investment decisions will likely need to take this uncertainty into account.

Latham & Watkins will continue to monitor developments related to the Agencies’ implementation of Sackett and any forthcoming WOTUS rulemaking.

This post was prepared with the assistance of Layla Rao in the Washington, D.C. office of Latham & Watkins.

Endnotes

[1] 143 S. Ct. 1322 (2023); 33 U.S.C. §§ 1362(7), 1342, 1344.

[2] An approved jurisdictional determination is “a Corps document stating the presence or absence of waters of the United States on a parcel or a written statement and map identifying the limits of waters of the United States on a parcel.” 33 C.F.R. § 331.2.

[3] See https://www.usace.army.mil/Media/Announcements/Article/3409141/26-may-2023-supreme-court-ruling-in-sackett-v-environmental-protection-agency/; see also https://www.lrc.usace.army.mil/Missions/Regulatory/Jurisdictional-Determinations/ (“As this decision will have implications on the determination of waters covered under the CWA, the issuance of all Approved Jurisdictional Determinations is on hold until further notice. Additional information will be provided as it becomes available.”); https://www.epa.gov/wotus/about-waters-united-states (“The agencies continue to review the decision to determine next steps.”).

[4] See https://www.epa.gov/sites/default/files/2016-02/documents/cwa_jurisdiction_following_rapanos120208.pdf (2008 guidance following the US Supreme Court decision in Rapanos v. United States, 547 U.S. 715 (2006)).

[5] 547 U.S. 715 (2006).

[6] 143 S. Ct. at 1341-43.

[7] Id. at 1336-37 (citing 547 U.S. at 739) (internal quotations omitted).

[8] Id. at 1338-39 (citing 33 U.S.C. § 1344(g)(1)) (emphasis added).

[9] See id. at 1339.

[10] Id.

[11] See Rapanos, 547 U.S. at 742 (internal quotations omitted).

[12] 143 S. Ct. at 1340 (citing 547 U.S. at 742, 755) (emphasis added) (internal quotations omitted).

[13] Id.

[14] Id. at 1341 n.16.

[15] Id. at 1362 (Kavanaugh, J., concurring in judgment), 1360 (Kagan, J., concurring in judgment).

[16] Id. at 1368 (Kavanaugh, J., concurring in judgment).

[17] See id. (Kavanaugh, J., concurring in judgment).

[18] Id. at 1369 (Kavanaugh, J., concurring in judgment).

[19] Id. at 1341-43, 1362 (Kavanaugh, J., concurring in judgment), 1359 (Kagan, J., concurring in judgment).

[20] Id. at 1341.

[21] 142 S. Ct. 2587 (2022).

[22] https://www.epa.gov/wotus/definition-waters-united-states-rule-status-and-litigation-update.

[23] Id. Michigan, New Jersey, and Florida have assumed administration of CWA Section 404 programs for certain waters in those states. See https://www.epa.gov/cwa404g/us-interactive-map-state-and-tribal-assumption-under-cwa-section-404.