A Different Take On "Draining the Swamp": President Trump Issues Executive Order Directing Reconsideration and Narrowing of Waters of United States Rule

On February 28th, President Trump signed an Executive Order titled Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the "Waters of the United States" Rule. That Order directs U.S. EPA and the Army Corps of Engineers to reconsider the Waters of the United States (also known as the “WOTUS”) rule, one of the marquee regulatory developments of the prior administration. In the near term, the Order will likely result in a stay of the numerous challenges to the WOTUS rule and create some uncertainty over the test to be used to determine what constitutes a water body or wetland subject to permitting under the Clean Water Act (“CWA” or the “Act”). In the longer term, the Order will likely lead to a different legal standard to identify waters of the United States that may substantially narrow the universe of water bodies and wetlands over which the Army Corps of Engineers asserts jurisdiction.

The Waters of the United States Rule: Under the CWA, dredge spoils (rock and sand released by dredging) are included in the definition of “pollutant” under 33 U.S.C. § 1362(6), and a permit must be issued by the Army Corps of Engineers before dredged or fill material may be discharged into “navigable waters” under Section 404 of the Act (33 U.S.C. § 1344). The Act defines “navigable waters” to include "the waters of the United States, including the territorial seas." 33 U.S.C. § 1362(7). Since its enactment in 1972, the Army Corps of Engineers and U.S. EPA have struggled to come up with an acceptable definition for the term “waters of the United States.”

In 2006, the United States Supreme Court issued a decision in Rapanos v. United States, 547 US 715, which addressed the limits of the Army Corps’ jurisdiction over wetlands. While five justices agreed that the underlying Court of Appeals decision should be reversed, they did not agree on the meaning of the term “waters of the United States.” While Justice Antonin Scalia developed a narrow two-part test for when wetlands could be considered “waters of the United States” (noted below), Justice Anthony Kennedy advanced a separate, broader test that looked to whether the wetlands in question had a “significant nexus” to a traditional navigable water.

Applying Justice Kennedy’s concurrence from Rapanos as a starting point, in 2015, U.S. EPA (along with the Department of the Army) issued the WOTUS rule, and defined the term “waters of the United States” to include, among other things, “wetlands, ponds, lakes, oxbows, impoundments, and similar waters” that are “adjacent” to traditional navigable waters, as well as waters that are determined, on a case-specific basis, to have a significant nexus to a traditional navigable water. The WOTUS rule established a presumption that any wetlands located in a 100 year floodplain, or within 4,000 feet of a high tide line or ordinary high water mark of a traditional navigable waterway, met this “significant nexus” requirement. After it was issued, that rule was challenged by numerous industry and state petitioners, and has been stayed while the challenges to rule proceed through litigation. 

The Executive Order: The Order does three things:

1. Establishes as policy “that the Nation's navigable waters are kept free from pollution, while at the same time promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of the Congress and the States under the Constitution”;
2. Directs U.S. EPA and the Department of the Army to reconsider the WOTUS rule and associated guidance in light of this policy, and authorizes the Attorney General to provide notice of that reconsideration in ongoing court proceedings; and
3. Orders U.S. EPA and the Department of the Army in that reconsideration to “consider interpreting the term ‘navigable waters,’ as defined in 33 U.S.C. 1362(7), in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States, 547 U.S. 715 (2006).”

What next? In the near term, the two agencies will need to formally initiate reconsideration of the WOTUS rule, and notify the Attorney General of that reconsideration. On February 28, 2017, U.S. EPA Administrator Scott Pruitt and Acting Army Assistant Secretary Douglas Lamont issued a document (to be published in the Federal Register) giving notice of intent to “review and rescind or revise” the WOTUS rule.

In addition, the United States Supreme Court had agreed to review a jurisdictional issue in the pending WOTUS litigation. The Department of Justice will likely request that the pending litigation, including the Supreme Court review, be held in abeyance and the existing stay of the rule be continued pending reconsideration of the rule.

While that reconsideration is ongoing, it is unclear which test the agencies will apply to ongoing permitting actions. With the WOTUS rule stayed, the agencies may immediately begin utilizing Justice Scalia’s jurisdictional test from Rapanos, although this may not be implemented in practice until guidance is issued, and may be challenged by third parties if used to develop an approved jurisdictional determination.  

In the longer term, the agencies will need to undertake rulemaking, including public notice and comment, to withdraw and replace the WOTUS rule. That rulemaking that will most likely be challenged by third party groups through litigation in the federal courts. 

If ultimately the agencies adopt Justice Scalia’s two-part test from Rapanos through rulemaking and that rule is upheld by the courts, the universe of wetlands and water bodies over which the Army Corps of Engineers will assert jurisdiction will likely be substantially reduced. Justice Scalia identified two findings to be made in order to consider a wetland as a “water of the United States”: (1) the adjacent channel must contain a “wate[r] of the United States,” (i. e., a relatively permanent body of water connected to traditional interstate navigable waters); and (2) the wetland must have a continuous surface connection with that water, making it difficult to determine where the “water” ends and the “wetland” begins. Rapanos, 547 U.S. at 742. Under this test, a wetland separated by a road or levy from a river or stream would not meet the continuous connection requirement--even if, under the “substantial nexus” test, the Corps would have considered the wetland to be jurisdictional.

If you have any questions on the impact of Order on future projects, or on the status of reconsideration of the WOTUS rule, please contact Tom McElligott at (414) 277-5531/thomas.mcelligott@quarles.com, Peter Tomasi at (414) 277-5677/peter.tomasi@quarles.com, Cindy Faur at (312) 715-5228/cynthia.faur@quarles.com, Joseph A. Drazek at (602) 229-5335/joe.drazek@quarles.com, or your Quarles & Brady attorney.