The End of an Era: U.S. Supreme Court Eliminates Significant Nexus Test, Ruling in Favor of the Sacketts and States’ Rights by Restricting Jurisdictional Waters of the United[...]

The End of an Era: U.S. Supreme Court Eliminates Significant Nexus Test, Ruling in Favor of the Sacketts and States' Rights by Restricting Jurisdictional Waters of the United States

May 26, 2023

Yesterday, the U.S. Supreme Court released its highly anticipated opinion in Sackett v Environmental Protection Agency, delineating the proper standard to determine waters of the United States (WOTUS) under the Clean Water Act (CWA). The Supreme Court significantly reduced the reach of WOTUS by holding that under the CWA the word "waters" refers only to geographical features that are described in ordinary parlance as "streams, rivers, oceans, and lakes" and to adjacent wetlands that are indistinguishable from those bodies of water due to a continuous surface connection. The ruling is a critical blow to the "significant nexus" standard originally penned by Justice Kennedy in Rapanos v. United States, 547 U.S. 715 (2006) and recently utilized by the Biden Administration's Revised Definition of Waters of the United States, which we previously reported on here. The significant nexus standard set a controversially expansive definition of WOTUS and required in depth, arduous, and often expensive consultant and legal analysis for applicability. This ruling may assist many in the regulated community that have faced uncertainty in permitting and project approval because of historic WOTUS ambiguity. However, the full ramifications of this ruling on environmental permitting remain to be determined and may not be as critical in states like California that already regulate "waters of the State."

WOTUS Background

Congress enacted the CWA to restore and maintain the chemical, physical, and biological integrity of the Nation's waters. (33 U.S.C. § 1252, subd. (a).) The CWA extends to all navigable waters, defined as "waters of the United States, including the territorial seas" and prohibits those without a permit from discharging pollutants into those waters. (Id. §§ 1362(7), 1311(a).) The term "waters of the United States" is not defined further within the CWA thereby leaving federal agencies, through regulation and policy guidance, to attempt to define the what constitutes a WOTUS-including what wetlands are WOTUS. Courts have then been tasked, and rarely reached consensus, on identifying the boundaries of the geographic reach of "waters of the United States" to guide the scope of regulatory jurisdiction under the CWA.

The United States Environmental Protection Agency (USEPA) and the U.S. Army Corps of Engineers (the Corps), collectively (the Agencies) have modified the WOTUS definition more than a handful of times. Upon initial enactment of the CWA, the Corps adopted the traditional judicial term for navigable waters-that the waters must be "navigable in fact." (39 Fed. Reg. 12115, 12119 (Apr. 3, 1974).) In 2008, after the U.S. Supreme Court decision in Rapanos, the Agencies released guidance for the CWA asserting jurisdiction over "wetlands adjacent to traditional navigable waters." (USEPA and Corps, Memorandum on Clean Water Act Jurisdiction Following U.S. Supreme Court's Decision in Rapanos v. U.S. (2008).) In 2015, under the Obama Administration, the Agencies issued the Clean Water Rule that amended the WOTUS definition to include eight categories of jurisdictional waters, including non-adjacent wetlands and other non-navigable water bodies. (80 Fed. Reg. 37054 (June 29, 2015).) In 2019, under the Trump Administration, the Agencies repealed the 2015 rule and restored the pre-2015 WOTUS definitions. (84 Fed. Reg. 56626 (Dec. 23, 2019).) Then, in 2020, the Agencies under the Trump Administration issued the Navigable Waters Protection Rule (85 Fed. Reg. 22250 (Apr. 21, 2020)), which narrowed the conditions upon which non-adjacent wetlands would be considered WOTUS, but this rule was vacated in 2021 by a federal district court in Arizona (Pascua Yaqui Tribe v. United States Environmental Protection Agency, Case No. CV-20-00266-TUC-RM, 2021 WL 3855977 (D. Ariz. 2021)), thereby prompting the Agencies' re-implementation of the pre-2015 WOTUS definitions.

On March 20, 2023, under guidance from the Biden Administration, the Agencies most recent regulation, the "Revised Definition of Waters of the United States" went into effect. (88 Fed. Reg. 3004 (Jan. 18, 2023).) The 2023 WOTUS Rule relies heavily on the pre-2015 regulatory framework and associated case law, while simultaneously reinvigorating the "significant nexus" standard delineated by Justice Kennedy in Rapanos.

Contemporaneous to the Agencies' various iterations of the WOTUS definition, the Supreme Court provided parallel jurisprudence guiding the interpretation of WOTUS. In 1985, the Court held that wetlands actually abutting traditional navigable waterways were considered WOTUS. (United States v. Riverside Bayview Homes, 474 U.S. 121 (1985).) In 2001, the Court held that WOTUS does not include "nonnavigable, isolated, intrastate waters" in its decision in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159, 121 (2001). Most relevant, in 2006, the Court issued its fragmented opinion in Rapanos v. United States holding that the CWA does not regulate all waters and wetlands, but failing to provide a majority approach to determining WOTUS jurisdiction. Justice Scalia, writing for the plurality, argued that wetlands that have a contiguous surface water connection to regulated waters "so that there is no clear demarcation between the two" are adjacent and may then be regulated as WOTUS. (574 U.S. at 742.) The concurring opinion, authored by Justice Kennedy, advanced a broader "significant nexus" test that would allow regulation of wetlands as WOTUS if wetlands "alone or in combination with similarly situated lands…significantly affect the chemical, physical, and biological integrity of other covered waters understood as navigable in the traditional sense." (Id. at 780.)

The Sacketts

In 2004, near Idaho's Priest Lake, the Sacketts purchased a residential lot that they planned to develop. In 2007, shortly after the Sacketts began filling the lot with sand and gravel, the USEPA issued an administrative compliance order stating that the property contained wetlands subject to CWA protection. In 2008, the Sacketts brought suit against the USEPA asserting that the agency's jurisdiction under the CWA did not encompass their property. Various aspects of the case had been slowly making their way up and down the federal court system. In 2021, the Ninth Circuit Court of Appeals considered whether the Sackett's Idaho property contained wetlands subject to CWA jurisdiction. The Sacketts argued that Justice Scalia's reasoning in Rapanos controlled because their property does not have a continuous surface connection to a navigable water. The Ninth Circuit disagreed and ultimately upheld Justice Kennedy's "significant nexus" test as the controlling authority in the Ninth Circuit. On September 22, 2021, the Sacketts submitted their petition for writ of certiorari to the Supreme Court requesting that the Court revisit its decision in Rapanos and on January 24, 2023 the petition was granted.

The May 25, 2023 Supreme Court Opinion

The Supreme Court granted the Sackett's petition to consider whether the Ninth Circuit set forth the proper test for determining whether wetlands are WOTUS under CWA § 1362(7). In its May 25, 2023 ruling, the Supreme Court reversed and remanded for further proceedings consistent with the holding that the CWA extends only to waters with a continuous surface connection with WOTUS (i.e., relatively permanent, standing or continuously flowing bodies of water connected to a traditional interstate navigable water) thereby making it difficult to determine where the water ends and the wetland begins.

In striking down the Ninth Circuit's reliance on Justice Kennedy's significant nexus test, the Supreme Court provides that, in order to assert jurisdiction over an adjacent wetland under the CWA, a party must establish that the wetland (1) is adjacent to a WOTUS and (2) has a continuous surface connection with that WOTUS. The majority opinion was delivered by Justice Alito with Justices Barrett, Gorsuch, Roberts, and Thomas joining. Justices Thomas, Kagan, and Kavanaugh each filed concurring opinions.

Justice Alito's majority opinion directly addresses the current Agency definition of WOTUS, finding that requiring a significant nexus to traditional navigable waters "lacks merit" for the following reasons:

• The Agencies' interpretation is inconsistent with the CWA because (1) Congress was not clear that it wanted to alter the federal/state balance of power over private property when it enacted the CWA, and (2) the EPA's interpretation of "significant nexus" gives rise to serious vagueness concerns in light of criminal penalties; and
• The Agencies' argument that Congress ratified the regulatory definition of "adjacent" when the CWA was amended to include reference to "adjacent" wetlands in § 1344(g)(1) fails because adjacent cannot include wetlands that are merely nearby covered waters and fails in the face of Congress's failure to amend § 1362(7).

Next Steps

Our attorneys are currently reviewing the opinion and determining the far-reaching implications the Sackett decision will have on the scope and applicability to pending and future environmental permitting. If you have any questions or concerns, please feel free to reach out to us.