EPA has had a difficult time defining the scope of the Clean Water Act (CWA) jurisdiction to determine which water and wetland discharges should be subject to federal permitting requirements. The debate centers on whether CWA jurisdiction extends to: (1) waters that are “relatively permanent, standing, or continuously flowing” and wetlands that are immediately adjacent to such waters, or (2) wetlands where there is a “significant nexus between the wetlands in question and navigable waters in the traditional sense.”  

Supreme Court Decision

On May 25, the U.S. Supreme Court narrowed the reach of the CWA over wetlands in Sackett v. EPA. In this case, the property owners had filled in a lot to build a house. The lot was adjacent to a ditch that connected to a creek that discharged into a lake that was considered a traditional navigable water. EPA claimed that the property was a wetland subject to the CWA permit requirements because of its connection to a navigable water. 

All nine Supreme Court justices agreed that the subject property was not a wetland subject to the jurisdiction of the CWA. A majority of the justices (i.e., five of the nine) based their decision on the “continuous surface connection” test. Under this test, only wetlands that are “undistinguishable” from adjacent traditional jurisdictional waterbodies can be covered by the CWA. This occurs only when the wetlands have a “continuous surface connection” to water bodies that are waters of the U.S. (WOTUS) in their own right, such that there is no clear demarcation between the “waters” and the “wetlands.”  

The Court rejected the broader “significant nexus” standard that would regulate wetlands that had some connection to jurisdictional water bodies, including indirect connections and connections to groundwater. Under the Court’s ruling, wetlands that are separated from traditional navigable waters cannot be considered part of these waters, even if they are located nearby.

The four concurring justices (including conservative Justice Kavanaugh and liberal Justices Kagan, Sotomayor and Jackson) departed from the majority opinion stating that the interpretation was too narrow and would fail to protect many adjacent wetlands. Some of these wetlands may be separated from covered waters by man-made dikes or barriers, natural river berms, beach dunes, or similar barriers. These four justices also questioned whether the majority opinion should exclude adjacent wetlands that may have temporary interruptions in surface connections due to dry conditions in summer. 

New WOTUS Rule Being Developed

With the issuance of the Supreme Court ruling, EPA and the Army Corps of Engineers (Corps) is tasked with developing a new rule that is consistent with the opinion. It is reasonable to expect a proposed rule that will include a broader definition than the one outlined by the majority. Adjacent wetlands that have some surface connection to navigable waters and are separated by only some minor barrier or temporary interruption could be considered subject to CWA jurisdiction. 

In late July 2023, EPA and the Corps already submitted a draft proposed rule to the White House Office of Management and Budget (OMB) for review. Neither agency has given any public hints on what standard the new regulatory policy will use to determine which wetlands will be subject to CWA authority, only that they intend to “surgically” amend the rule issued earlier this year. The quick turnaround on the draft proposed rule, however, suggests that EPA and the Corps have not made any dramatic changes to the WOTUS regulation that would ensure it complies completely with the Supreme Court decision in Sackett. The critical question is whether the new WOTUS rule will be consistent with the Supreme Court ruling, and whether additional regulatory and legal action will be needed.  

In addition, EPA officials have indicated that the agency plans to invoke statutory authority to bypass notice and comment procedures for “good cause.” The Administrative Procedure Act (that governs the process for developing federal regulations) allows agencies to issue a direct final rule where the agency has “good cause” to find that the notice and comment process would be “impracticable, unnecessary, or contrary to public interest.” In technical guidance from the Office of the Federal Register, such situations may include “emergencies, where problems must be addressed immediately, minor technical amendments and corrections that have no substantive effect.” Even though EPA claims “good cause” because it would prefer to have a final rule in place by September 1 to provide much needed clarity for the regulated community, it is not clear that use of the “good cause” authority is warranted in this case.

Looking Forward

Regardless, the Supreme Court’s decision in Sackett narrows the definition of WOTUS and provides some much-needed clarification on the issue. For example, metalcasting operations may be able to improve a parcel of land or build a structure without a CWA permit, provided that the land does not include a wetland with a continuous surface connection to a traditional navigable water. This will not, however, resolve all the disagreements of what should be covered as an adjacent wetland. Fact-specific determinations will still be needed, the language and scope of the new WOTUS regulation will be critical, and additional legal challenges are a virtual certainty when EPA finalizes a new WOTUS rule.