US Supreme Court Narrows Scope of CWA Jurisdiction Over Wetlands; EPA and Army Corps Finalize Rule in Response; and the Litigation Keeps on Coming

January 18, 2024
Todd D. Kantorczyk, Esq.
MGKF Special Alert - 2024 Federal Forecast

When we updated the ongoing saga that is the effort to define the extent of wetlands that qualify as Waters of the United States (WOTUS) subject to federal Clean Water Act jurisdiction as part of the 2023 Forecast issue, the EPA and the Department of the Army had just announced a final rule that reverted to the WOTUS definition in place before 2015.  That rule took effect in March 2023, and shortly thereafter 26 states and various industry groups filed lawsuits challenging the rule.  The actions resulted in two injunctions that blocked implementation of the rule in 26 states.  As predicted, however, the Supreme Court subsequently issued its decision in Sackett v. EPA, which significantly narrowed the scope of adjacent wetlands that qualify as WOTUS by explicitly rejecting the “significant nexus” test that was in place before 2015 and replacing it with a “continuous surface connection test.”  As a result, in September 2023 EPA issued an amended final rule to conform with the Sackett ruling.  Of course, litigation has resumed, once again raising the prospect of a patchwork of rules to determine when federal permits are necessary for projects that impact wetlands.

As noted, the holding in Sackett limited the authority of EPA to regulate wetlands by embracing a “continuous surface connection test” to determine if adjacent wetlands are subject to the Clean Water Act (CWA).  In doing so, the Court explicitly rejected Justice Kennedy’s “significant nexus” test from Rapanos v. United States. While the 9-0 decision was unanimous in judgment by holding that the Sacketts’ wetland was not subject to federal jurisdiction, the court was sharply divided as to the test to determine when an adjacent wetland qualifies as a WOTUS. A five-justice majority held that the CWA’s jurisdiction includes only adjacent wetlands that are indistinguishable from WOTUS due to a continuous surface connection. Under this framework, for an adjacent wetland to be subject to CWA jurisdiction, the adjacent body of water must constitute a WOTUS, and the adjacent wetland must have a continuous surface connection with the WOTUS, such that it is difficult to determine where the body of water ends, and the wetland begins.  A more detailed description of the Sackett case can be found in our May 2023 MGKF Litigation blog post.

Following the Sackett decision, the agencies requested and received stays in the litigation challenging the March 2023 WOTUS rule so that the agencies could amend the rule to conform with Sackett.  This conforming rule was issued as a final rule at the beginning of September 2023.  Consistent with the Sackett decision, the September 2023 WOTUS rule removed all references to the significant nexus test and limited the term “adjacent” to mean having a continuous surface connection.

Issuance of the September conforming rule, however, did not resolve the WOTUS litigation that had been stayed following Sackett.  Indeed, the plaintiffs have recently sought to revive those lawsuits, in one case amending the complaint to argue that the September conforming rule still exceeds CWA authority and that the agencies violated that Administrative Procedure Act by foregoing public comment.  Additionally, House Democrats and Senate Republicans have floated bills to amend the CWA and redefine WOTUS, although prospects for either bill are low given the current makeup on Congress.

In sum, while the universe of wetlands subject to federal jurisdiction is likely be smaller in 2024 than in years past due to the Sackett decision and issuance of the September final rule, the back and forth, and resultant uncertainty surrounding the scope of WOTUS subject to CWA jurisdiction will continue to persist and bears watching as the pending cases move forward.