EPA Announces “WOTUS” Replacement Rule that Will Affect Development and Narrow Jurisdictional Wetlands and Waters

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On December 11, 2018, the Environmental Protection Agency (“EPA”) and the Army Corps of Engineers (“USACE”) announced the long-awaited replacement rule for the 2015 “waters of the United States” rule (“WOTUS I”). In effect, the 2015 WOTUS I rule expanded EPA and USACE jurisdiction over wetlands and similar features (and created uncertainty) under the federal Clean Water Act (“CWA”), which complicated permitting for land development. As written into the regulatory text from 2015, the agencies’ “case-by-case” interpretation of their jurisdiction had the tendency of placing landowners, developers, farmers, and other stakeholders in the precarious position of not knowing whether a given body of water was jurisdictional under the CWA. In practice, landowners could find themselves on the wrong end of an enforcement action if either EPA or USACE determined that the waterbody was jurisdictional, even if such a determination was only made after the landowner’s allegedly offending activity (e.g., construction, plowing, backfilling) had ceased.

Now, the replacement rule (“WOTUS II”) proposes to scale back the scope of EPA and USACE jurisdiction over wetlands and similar features under the CWA. WOTUS II will be published in the coming weeks for public comment. Because the proposed rule will impact land development and permitting, and will be hotly contested, regulated stakeholders should seriously consider participating in the process and submitting comments on the important proposal.

Background on the WOTUS I Rule

The WOTUS rules attempt to define jurisdictional waters over which the CWA gives EPA and the USACE broad authority. The CWA vaguely identifies such jurisdictional waters as “navigable waters,” which are “waters of the United States, including the territorial seas.” Ever since the CWA was signed into law in 1972, courts, agencies, and stakeholders have struggled to clearly delineate the scope of “waters of the United States.” In 2006, after a series of earlier and sometimes inconsistent decisions, the U.S. Supreme Court addressed the issue in Rapanos v. United States in the context of whether a contested wetland fell within the meaning of “waters of the United States.” But the Court was split on the issue. The prevailing opinion to date has been Justice Kennedy’s concurring opinion, which developed the “significant nexus” test to determine the outer limits of “waters of the United States.” The “significant nexus” test asks whether “the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as ‘navigable.’”

Using Justice Kennedy’s opinion, the Obama EPA/USACE attempted to set forth bright-line tests for what constitutes a “water of the United States” while also giving EPA and USACE authority to interpret those tests on a case-by-case basis. This ultimately broadened, but created uncertainty, regarding the scope of jurisdiction. Upon publication in the Federal Register in 2015, numerous parties, including state governments, immediately filed suit to prevent either EPA or USACE from enforcing WOTUS I on the grounds that the rule grossly exceeded the authority of either agency under the CWA. Over the subsequent three years, conflicting judicial decisions created a national split with roughly half of the United States subject to WOTUS I and the remainder abiding by earlier CWA interpretations and guidance.

The WOTUS II Proposal and Efforts to Undo the WOTUS I Rule

The Trump administration almost immediately began rolling back WOTUS I, the culmination of which is the proposed WOTUS II rule. On February 28, 2017, President Trump issued an executive order directing EPA and USACE to “consider interpreting the term ‘navigable waters’ . . . in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States.” In contrast to Justice Kennedy’s opinion, Justice Scalia’s plurality opinion narrows the scope of CWA jurisdiction, providing that “‘the waters of the United States’ includes only those relatively permanent, standing or continuously flowing bodies of water ‘forming geographic features’ that are described in ordinary parlance as ‘streams[,] . . . oceans, rivers, [and] lakes.’ . . . The phrase does not include channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall.”

Both EPA and USACE began working on a replacement rule for WOTUS I. The two agencies also attempted to add a 2020 applicability date to WOTUS I to provide the agencies enough time to draft and promulgate a replacement rule. Between August and November 2018, however, two separate federal court decisions invalidated the 2020 applicability date citing violation of the Administrative Procedure Act. So there has been continued uncertainty resulting from court decisions.

During the recent announcement of WOTUS II, EPA indicated that its intent is to scale back the broad jurisdictional scope and provide clarity for the regulated community. EPA’s Acting Administrator, Andrew Wheeler, promised that the proposed rule would provide a definition of “waters of the United States” “that respects the limits of the Clean Water Act and provides states and landowners the certainty they need to manage their natural resources and grow local economies.” Mr. Wheeler went on to say that, for the first time since the CWA’s passage in 1972, WOTUS II will “clearly defin[e] the difference between federally protected waterways and state protected waterways.” In the press release, EPA stated that the proposed rule will maintain federal CWA jurisdiction over “traditional navigable waters, tributaries to those waters, certain ditches, certain lakes and ponds, impoundments of jurisdictional waters, and wetlands adjacent to jurisdictional waters.” On the other hand, the proposed rule defines water features that are not covered by the CWA, such as those “that only contain water during or in response to rainfall.”

Overall, the proposed regulatory text of WOTUS II differs drastically from WOTUS I and eliminates the “significant nexus” analysis. In the coming weeks, EPA and USACE will publish WOTUS II in the Federal Register for a 60-day public-comment period. Given that WOTUS I generated well over one million public comments, the comment period for WOTUS II will likely be extended, perhaps several times. As with the original rule, the WOTUS II rulemaking process may take several years to complete.

We encourage you to stay apprised of developments and consider providing comments on the proposed rule. Please feel free to contact any member of the McNees Wallace & Nurick Environmental or Land Use Groups for assistance or questions regarding any environmental, land use, or development issues.


 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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