Clean Water Act – Forward to the Past?

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Jack Capizzi:  Welcome to today's Federalist Society virtual event. Today, January 25th, we are excited to present the "Clean Water Act - Forward to the Past?"

 

      My name is Jack Capizzi, and I'm an Assistant Director of Practice Groups at The Federalist Society. As always, please note that all expressions of opinion are those of the experts on today’s call.

 

      Today we are delighted to be joined by Kevin Minoli, who's a Partner at Alston & Bird where he leads the Environment, Land Use and Natural Resources Washington, D.C. practice and is a member of the firm's ESG, Cryptocurrency, and COVID-19 Response & Relief teams. Before that, Kevin spent 18 years with the Environmental Protection Agency, ultimately serving as the EPA's acting general counsel.

 

      We're also joined by Tony Francois, who's a member of the executive committee for Environmental Law and Property Rights at The Federalist Society. He's a partner in the San Francisco law firm Briscoe Ivester & Bazel. Prior to joining his firm, he was an attorney with the Pacific Legal Foundation for nine years. Tony has litigated many issues arising under the Clean Water Act at all levels of the federal judiciary and across the country. While with PLF, he was lead counsel for Mike and Chantell Sackett and is currently co-counsel for them alongside the Pacific Legal Foundation before the Supreme Court of the United States where their Clean Water Act case was argued as the first case of the current term.

 

      After our speakers have given their remarks, we will turn to you, the audience, for questions. If you do have a question, please type it into the Q&A feature at the bottom of your screen, and we will handle the questions as we can towards the end of today's program. With that, thank you all for being with us. Kevin, the floor is yours.

 

Kevin Minoli:  Great. Thank you, Jack. I appreciate that. It says that I can't share my screen here, so I'll just go ahead and talk about -- talk through what I was going to do as an introduction. But we thought it'd make a -- it'd be good to spend just a couple minutes at the beginning to talking about how we got here in terms of the new rule that the agencies have just put out and what that -- it didn't come out of nowhere. It's built on a history, and so just spending a few minutes at this outset to lay that foundation we thought would be worthwhile.

 

      And really, where we start is the text of the Clean Water Act. That's where everything goes back to. And it's the Section 301, which is the provision of the Clean Water Act, that says that the discharge of any pollutant by any person shall be unlawful. And from there, you get to Section 502, which defines what a discharge of a pollutant is. And that's the place where navigable waters shows up for the first time, and it defines the discharge of a pollutant to be any addition of any pollutant to navigable waters. Navigable waters is also defined in 502, and it's defined as the waters of the United States, including the territorial seas. And so that's how we get to this journey that we've been on for quite a while now in terms of what WOTUS actually means. What are the waters of the United States, and what's the boundaries and limits of those?

 

      The reason why it's important to know that is because it's not just the Wetlands Program, but there are multiple Clean Water Act programs that are tied to the definition of Waters of the United States: so your Water Quality Standards program and Total Maximum Daily Load programs under Section 303, oil spill programs under 311, state travel certifications under 401, your typical industrial discharger permits under 402, and your discharge and fill material permits under 404. All of those are governed by the definition of Waters of the United States. Oftentimes it's brought in the context of -- these issues are brought up in the context of a wetlands permit, but it has an application that goes well beyond that in terms of its reach.

 

      The last ten years or so, maybe, have felt pretty raucous in terms of the back and forth—and particularly since 2015, the back and forth—between the different administrations on what the definition of waters of the U.S. should be. But prior to that, there was actually a good period of calm in terms of where we came from and in terms of the definitions of what is a water of the United States.

 

      There was a period at the very beginning after the 1972 Clean Water Act was passed where the Army Corps and the EPA actually had differing definitions. And so, at the very outset, there was dueling definitions in the '70s. That was resolved by a memo written by then-Attorney General Civiletti who said that he was EPA, who alternately had the legal authority to determine what constituted a navigable water. And so, that memo remains in effect, but the EPA and the Army Corps have worked hand-in-hand since that point. The two agencies have had the same definition since 1986 -- or had had the same definition from 1986 all the way through 2015. And while the Supreme Court had impacted what that definition meant, it had been in effect everywhere in the U.S. for a period of nearly 30 years.

 

      It was in 2015 when the Obama administration wrote the Clean Water Rule that we first had our real patchwork of jurisdiction in terms of where you lived determined what definition applied in terms of the reach of the Clean Water Act for you. And that continued to a lesser degree under the Navigable Waters Protection Rule in 2020, and it remains to be seen whether or not we'll be back in that place in 2023 or soon thereafter with the new revised definition of waters of the U.S.

 

      And so with that, I'll turn it over to Tony to give us an overview of what that new revised definition is, and then we'll move forward from there.

 

Tony Francois:  Thank you very much, Kevin, and I also want to thank The Federalist Society for having us on today and thank all of you for joining us.

 

      So on January 18th, which was just a week ago, the EPA announced a new final rule revising the definition of navigable waters or Waters of the United States, which as Kevin explained quite well defines the boundaries or the footprint, if you will, of both EPA and the Army Corps Clean Water Act authority within the United States.

 

      So what I want to do is give an introduction to the new rule by comparing it to the 2020 rule, which is what immediately preceded it, and then I'll hand it back to Kevin to talk about how the new rule, even though it is largely based on the pre-2015 regulations, and especially regulations that were adopted in the mid-80s, there are actually some differences in the new rule from those older ones, too.

 

      So the 2020 rule—I want to start by observing that both supporters and critics of the 2020 revised definition of Waters of the United States either critiqued it or applauded it based on a common observation about it, which is that it significantly reduced that footprint. And I think it's just worth being aware as you look at the new rule that the 2020 rule may be one of the largest self-imposed reductions in federal regulatory authority, at least in the environmental arena, that I'm aware of. And many analysts and policy advocates claimed that the 2020 rule removed federal permitting authority and protection from roughly half of the nation's wetlands. And again, supporters of the rule pointed to that and said, "That's a good thing." And critics of the rule pointed to that and said, "That's a bad thing." But nobody really disagreed that it was a very substantial self-imposed reduction in federal authority in this area.

 

      So the 2020 rule regulated four basic categories of water bodies. These are non-exclusive, meaning that some water features would satisfy two or more of these categories potentially, but they break down into what are called traditionally navigable waters, the kind of the longstanding and mostly undisputed federal authority over rivers, lakes, and other features that are used to transport goods and commerce going back to when that was the main way that goods were moved in commerce and continuing to this day. The 2020 rule also included the territorial seas, which is that explosive part of the definition, and that, so obviously, makes sense. And so the 2023 regulation, the new rule, continues both of those categories. And I would say generally the ongoing inclusion of both of those categories has not been terribly controversial.

 

      The next category that the 2020 rule regulated was tributaries, and those continue to be regulated, but there are substantial differences between the way the 2020 rule defined regulated tributaries and the approach taken in the new rule. So I'll circle back on that in just a moment.

 

      The 2020 rule regulated a category of water body called lakes and ponds as well as impoundments of otherwise regulated waters. These categories are also carried over in the new rule. The category that the 2020 rule calls lakes and ponds sort of—and this is one of the areas where there is some fairly significant differences—sort of maps to a category of waters called intrastate lakes and ponds, streams, and wetlands. And I'll talk about the differences between those two in a moment as well.

     

      And then the fourth category that the 2020 rule regulated was adjacent wetlands, and the 2023 rule continues to regulate adjacent wetlands, but again, with a fairly different definition of what adjacent means. Well, I'll clarify that in a minute. So there's one category that the 2023 rule adds, which was not regulated by the 2020 rule, and that's intrastate waters, including intrastate wetlands. So these might be terminal lakes in the arid west that sit across a state boundary, rivers that run without draining to larger systems and cross a state boundary.

 

      If you're interested in a fascinating policy rabbit hole to go down, you can look at the preamble for each rule and read the debate about whether or not the Clean Water Act intended to adopt prior definitions of interstate waters as a basis for federal regulation. The thing to know in practice is that the 2023 rule reestablishes regulation of interstate waters that otherwise would not qualify under one of these categories. So let's talk about the differences briefly because there's a lot of detail to this, and if you practice in the area, you'll want to look at the preamble for these details.

 

      But adjacent wetlands and tributaries -- and the important thing to understand in how these two rules, 2020 and 2023, regulate adjacent wetlands and tributaries is to realize that these two types of water bodies or features were the subject of a Supreme Court decision in 2006 called Rapanos v. United States. That decision ruled in favor of Rapanos, the petitioner, in that Supreme Court case, on the very basic proposition that there are limits to what tributaries and what adjacent wetlands the agencies may regulate under the Clean Water Act. What those limits are is the very complex question that Rapanos launched into the world of Clean Water Act practice because there's no majority opinion in Rapanos. Four of the justices joined in opinion, authored by the late Justice Scalia, taking a fairly narrow view of that, that as the tributaries and adjacent wetlands, the Act only regulated its -- its outer limits are relatively permanent and continuously flowing rivers and streams as tributaries, and only those wetlands that abut other regulated waters to the degree that it's difficult to tell where one ends, and the other begins. And so this is a pretty narrow view of it, much narrower than the agency's practice has ever been.

 

      Justice Kennedy authored a lone concurrence in which he agreed that there are limits to what the agencies can regulate under the act but expressed a much more expansive way of understanding that. The shorthand for it is the significant nexus test. Under that test, as Justice Kennedy described it, a wetland—either alone or in combination with similarly situated wetlands—is regulated if it significantly affects the physical, biological, and chemical integrity of actually navigable waters downstream of the wetland. And so, this is a pretty broad view of it.

 

      And in the years following the Rapanos decision, almost all federal courts who have addressed the question have opted for the Kennedy concurrence and its significant nexus definition as the way of defining or of interpreting the Clean Water Act and what the agencies can regulate.

 

      So the 2020 regulation was an effort to synthesize the plurality opinion and Justice Kennedy's concurrence in Rapanos into one rule that regulated some tributaries and adjacent wetlands and not others. For tributaries, it drew the line at whether the tributary was ephemeral or not, and it took the approach that only perennial—as always flowing streams—or intermittent—that had some seasonal flow—were regulated but that ephemeral tributaries—those that only flow in direct response to precipitation—were not regulated. This was particularly controversial in the arid west where many of the water bodies there are ephemeral. The new regulation dispenses with that distinction: perennial, intermittent, or ephemeral, and instead what the new regulation does is it adopts either the Rapanos plurality—that is, tributaries are regulated if they're relatively permanent and continuously flowing, or if they significantly affect downstream navigable waters. And this definition in the new regulation requires that tributaries flow into particular types of waters in order to be regulated.

 

      And then in the area of adjacent wetlands, the 2020 rule, as I mentioned before, took a much narrower view of what wetlands would be regulated and limited that to directly abutting or separated from a regulated water only by a barrier of some kind but that anything farther afield than that was not regulated. The new regulation, again, like tributaries, adopts the Rapanos plurality and concurrence as alternate tests for whether or not a wetland is regulated. So if it directly abuts another regulated water, or if it significantly affects—either alone or in combination with other wetlands—significantly affects a downstream water.

 

      I won't take time now. We could perhaps address it in the questions—or maybe Kevin will address it briefly—but the new regulation includes a definition of the term "significantly affect" and provides some factors for the agencies to evaluate and consider when determining whether or not a wetland or a tributary has this significant nexus type connection with a downstream water body.

 

      There are several exclusions from regulation that are in the 2020 rule that do not carry over into the 2023 rule. But there are a number that do. One that practitioners may want to look at are ditches. The 2020 rule has a definition of ditches that are not regulated. The 2023 rule has a somewhat narrower category of ditches that are not regulated under the Act, and so that's kind of an ongoing difficulty. Wherever there's a road in our nation, there's likely to be a roadside ditch, and the agencies have long had difficulty coming up with a clear and consistently applied rule that captures the common sense idea that just a roadside drainage ditch is not what the Clean Water Act is concerned with, but at the same time, recognizing the fact that many of the ditches in the country used to be natural streams that have been excavated or modified.

 

      So I want to say those are the main, new, or different aspects of the rule, the new rule. There is a lot to it, and those who are advising clients or interested in the policy debates will want to -- will look at the text of it and get into those details.

 

      But with that, I'll hand it back to Kevin to talk about how this new rule—even though it's modeled on the pre-2015 regulations and guidance—may differ from those in some respects.

 

Kevin Minoli:  That intro is spot-on because the administration said repeatedly that what this first rule was going to do—and they had indicated this would be the first of two WOTUS rules that they were intending to write—the first one was going to return the jurisdiction back to the pre-2015 status quo and that it was going to adopt essentially the 1986 regulations as modified by the Supreme Court cases, particularly the Rapanos decision and the SWANCC decision. And so what we expected to see was something that was very close to that 1986 regulatory text with the new overlay of significant nexus or the Rapanos decisions standards. And we did find, I think, some similarities. There are some similarities between what was adopted in the new rule and what was in existence prior to 2015.

 

      So as Tony mentioned, one of the biggest issues coming out of the Rapanos decision was whether or not you could rely on both tests, or whether you could rely on just the Kennedy test or Justice Scalia test for asserting jurisdiction. The government's position has always been that you could rely on either and that what was adopted by the government back in 2007 right after the Supreme Court decision and has been consistent throughout. And that's what they did include in the final rule here so that you'd be -- there are aspects of both the Scalia standard and the Kennedy standard in the final rule, and so that's consistent with what was done before.

 

      And as Tony mentioned, the definition of adjacent, which is, obviously, at the center of the Supreme Court's forthcoming decision in Sackett—which we'll talk about in a minute—that remains to be -- that's the same as it was previously. And so there are a lot of strict foundational pieces that are consistent, but there are important differences between what was adopted in the final rule and what existed prior to 2015. One of those big areas of differences is that the agencies did codify exemptions that had been in practice for a while but not yet in the regulations. So Tony mentioned ditches and other things didn't -- they did not codify all the exemptions or exclusions that were in the 2020 rule, but they included ones that had not been in the 1986 regulatory text.

 

      I think the thing that's going to be potentially the most significant change is that they actually changed the standard for what constitutes a significant nexus. And so prior to this final rule now, the standard had always been that the impact -- the nexus had to have more than a speculative or insubstantial effect on a downstream traditionally navigable water. So that was what was adopted right after in the Rapanos Guidance, that more than speculative or insubstantial effect on the downstream traditionally navigable water standard.

 

      Now, in the final rule, it adopted a standard where the water has to materially influence the chemical, physical, or biological integrity of a downstream water. And that's something that's, I think, a significant change that was not in the proposal. And it was something that the agencies finalized, and so it remains to be seen whether or not that's something that would withstand challenge. It's also, I think, further -- the importance of it, of that change, is further -- is exacerbated by the fact that, for the first time, the government has codified what they refer to as functions and factors that need to be considered when you're making a determination about whether something materially influences another water. And those also were not in the proposal, so those are important critical things in terms of determining whether or not you've got a significant nexus that are all brand new in the final rule. And so those are things that I think will be areas where people will want to raise in their litigation. We'll talk about litigation in a minute, but those are things that stand out to me.

 

      The other thing that I think is worth mentioning is that the agencies did attempt to take the position that if a part of this rule is found to be invalid, that the remainder of the rule should be left in place and remain in effect. So they spent time in the preamble talking about the severability or segregability of different provisions in an attempt to try to save portions of their rule if any one portion is deemed to be beyond their authority. That's something that within the last two rules, the Navigable Waters Protection Rule and the Clean Water Rule, when courts set aside the rule, it was set aside in total. It was not sort of broken out piece by piece. But that was not always the case.

 

      The Supreme Court in the SWANCC decision certainly curtailed the 1986 definition of Waters in the United States, but the remaining part of the definition remained in place for many, many years after that. So it's both sort of novel for the government to stake that position, but also not necessarily novel if the courts follow it. But it remains to be seen whether the courts would agree that just because the agency has said that they should be segregated or severable that they will be treated that way. So I think it's -- there's a significant number of changes compared to what the agencies at least had said that they were indicating that they were going to do in terms of modeling this after the 1986 rule.

 

      That last point in terms of severability and whether or not a court decision will—on one aspect of the rule—will be fatal to the remainder of the rule, that keys up the question about whether or not the agencies have achieved their goal of having a durable rule. One of the things that both the leadership of EPA, the leadership of the Army Corps, said repeatedly throughout the development of this 2023 rule was that their goal was to have a durable rule that would last longer than the last two had lasted, and that would be able to withstand challenges and withstand the scrutiny that it was going to obviously be under.

 

      So I think we're in a transition now to talk a little bit about whether or not we think the government has achieved that goal. And I guess I'll let Tony go first in terms of his thoughts on it, and then I'll chime in with mine.

 

Tony Francois:  Sure. Thanks, Kevin, and thanks for that analysis.

 

      There's two ways that the agencies face litigation on the scope of their authority. For a very long time, it was almost exclusively individual permitting decisions but more frequently enforcement cases. And so the Riverside Bayview Homes, which was one of the important cases in the mid-80s, was a permit decision. The Rapanos case was an enforcement action. The SWANCC case in 2001 that dealt with a migratory bird rule, was a permitting issue. The Sackett case was a permitting case. The Hawkes case that was decided a few years ago on the ability to challenge approved jurisdictional determinations was a permitting case. And so, I think it remains to be seen what the fate of the current -- of the new rule is in those kinds of settings because those are very factually bound. And so I'll talk about the Sackett situation in just a moment as a good illustration of that.

 

      The other kind of litigation that has arisen in the last seven years is that the definition of navigable waters under the Clean Water Act has joined the ranks of political legal issues that are part now of the red state/blue state industrial complex, and my thought on that having participated in that and observed it now for quite a while is the courts, to my observation, seem very resistant—district courts and circuit courts—very resistant to, I think, getting drawn into the back and forth pendulum swing between administrations of different party outside of concrete factual situations.

 

      And so there's been a lot of litigation. There have been injunctions on stays issued. The 2015 rule faired rather poorly. The 2020 rule had pretty mixed results in this litigation. But all of it was mostly procedural. And there are very few precedential decisions on either of those rules. So my sense is that this rule—depending on the outcome -- in a certain sense, depending on the outcome of the Sackett case, but in another sense, depending on what kinds of enforcement actions wind up getting litigated—may fair better than the last few have.

 

      It's kind of an opportunity to talk about what impact the Sackett decision might have on this. The important thing—I won't get into the facts of the Sackett case other than to say that it was a perfect vehicle for Supreme Court review because—almost explicitly agreed between the Sacketts and EPA—if the case was decided under the Rapanos plurality standard of direct abutting for wetlands, then the Sacketts, as a matter of law, would win because the EPA's record demonstrated that it did not have that kind of connection.  If decided under the significant nexus test—although the Sacketts hotly contested that below—the federal courts very easily upheld the EPA's assertion of authority under the significant nexus test, and under that approach, their property is regulated. And so as a question for the court, "Would you like to take this 4-1-4 decision and try to turn it into a five or six to something decision that provides some better clarity about what's regulated?" it had great appeal.

 

      There's two things that came out of the argument that I think are really important. One is that there's -- I did not hear any interest or support from any member of the Court for retaining Justice Kennedy's significant nexus opinion, and I think that is probably going to go by the wayside. EPA made clear, though, during that argument, that it does not see the significant nexus test as a gloss-on, or a way of understanding the term "adjacent", when it comes to adjacent wetlands and that adjacent wetlands defined as "bordering, contiguous, or neighboring" is a parallel and independent source of their authority and that even without the significant nexus opinion from Rapanos, the agencies still take a fairly broad view of what "neighboring" is and that the point in the argument at which Justice Gorsuch and the Solicitor General kind of refuse to agree with each other anymore, it was around a mile from another regulated water body, and the Solicitor General would not say, as a matter of law, that a mile is too far away. Most of the enforcement and permitting cases are closer than that, but it illustrates that while significant nexus may not be long for the books, the scope of adjacency will continue to be.

 

      And the only question that the Sackett case would reasonably address is, does adjacent extend across a road through which there are no hydrologic connections: no culverts, no seepage, no drainage? And if the Court says yes, that adjacent in the statute, and as used in the regulations, can include those kinds of over-the-road or over-the-barrier wetlands that the agency has regulated almost from the beginning, then that doesn't say much about the fate of what adjacent means in these regulations. And the agency will probably be able to continue using a broad view of adjacency to regulate wetlands that don't have obvious connections, at least surface hydrological connections, to other regulated waters.

 

      On the other hand, if the Court in Sackett says, "No, you may not regulate wetlands that don't have a direct surface connection," then that will have a significant effect on the scope of adjacency in the regulations, and I think would probably require a rewrite. So I'm very curious what the agency—I mean, setting aside Sackett for a minute—what the agency has in mind for its second-step rule-making that it hopes to have out this fall. I don't think that the -- it's around, I think, four of the red state-blue state litigation over this regulation just started. I don't think that's going to make a big difference in the outcome of the regs. We'll see, but I think at best those wind up stalling the resolution of the substantive legal questions, which my sort of crude experience tells me are actually only going to get resolved by the courts, eventually the Supreme Court, in individual enforcement cases.

 

Kevin Minoli:  It's interesting because I actually think that the agency's new rule is under more risk from those initial facial challenges than it sounds like that you might be. And the reason I think that they're under more risk is in part because of how the agency's responded to the district court decision regarding the Navigable Waters Protection Rule. So that is—just to remind folks, there was a district court decision after a number of courts had declined, specifically, to vacate the rule. They remanded the rule, or they had not yet made their decisions.

 

      A single district court, initially, vacated the Navigable Waters Protection Rule prior to actually going through briefing, prior to going through summary judgment motions and having an actual case put before them. The court found that that rule could not have been -- would not be able to be repeated or supported and so vacated it. And there was an immediate question about, "Well, was that vacatur -- was that only limited to the district of Arizona, or was that limited --or was it broadly across the nation?" And the government ultimately, while seeming to sort of not wanting to go make its opinion known, immediately, ultimately, adopted the view that it was a nationwide injunction -- nationwide vacatur of the rule. That's a significant change from where the government has been, at least in the nearly 20 years that I was there.

 

      The government, and the EPA in particular, was very reticent to ever concede that a single district court could issue an order that would have nationwide impact or effect. And it came down to, at times, whether the court had said that plain language mandated a certain result that at times would be treated as nationwide. But if it was not at that level, then it was just determined to be only applicable in the district of the court that made the decision.

 

      Here it was in the agency's interest, in the Newman administration, to have the Navigable Waters Protection Rule taken off the books, simplified what they had to do in some respects, and I think they were under a lot of pressure to accept the opportunity that was in front of them and to say that it was a nationwide injunction -- or a nationwide vacatur. But that has potential ramifications for the fact that we're going to see litigation in a number of district courts across the country, whether they be this initial round of facial challenges or the enforcement in permit-specific challenges that Tony was talking about.

 

      And it's going to be much more difficult for the agency to say when one district court vacates the rule—and there will be some judge somewhere probably that vacates the rule—that it's going to be hard for the agencies to say, "Well, no, that vacatur doesn't really apply anywhere else." And so I think that the agencies may have made an expedient decision in embracing the nationwide effect of that district court decision, but I think it's -- strategically it's a difficult one. It's going to come back -- potentially come back to be a problem because, as folks may remember, the Supreme Court has already said 9-0 that all these challenges go in district courts. And the district courts -- it is hard to go undefeated in the district courts. And so I think that it's going to be a challenge for them in that regard.

 

      I also think that the procedural vulnerabilities of the rule are not insignificant in terms of the things that were finalized in the final rule that did not appear in that proposal that are sort of fundamental, and fairly fundamental to how the new jurisdictional approach operates: the definition of significant nexus, the factors, and functions. Those are things that typically you would expect that the Administrative Procedure Act requires people to have notice of prior to that being finalized in a rule. And I think there's going to be some significant vulnerability for the agencies in having to explain why those are all logical outgrowths of the proposal. So I think I see a little bit more vulnerability there than I think Tony does.

 

      And on the flip side, I see a little less vulnerability on the potential outcome of the Sackett case. Had we had this conversation before the oral arguments, I would have been absolutely -- I was in the camp of this is going to be a decision that decides whether or not you can use the Kennedy test or the Scalia test. I think, at least what I heard in the oral arguments, was really trying to not—to stay away from that—needing to make that decision.

 

      Doesn't mean -- we all know that oral arguments don't always mean -- they're not always the same in oral arguments as what we see in the opinions, and so it could be a difference there. But I heard an intense focus on what adjacent means and whether it means abutting and whether it means touching in a way that I was not, frankly, expecting in terms of how that argument played out. So I think it remains to be seen, but I think there's more vulnerability on the district court level and maybe a little less on the Supreme Court level.

 

Tony Francois:  One -- actually two brief thoughts, also, on vulnerability. I see in the new rule an adaptation to two increasingly prominent themes of the Supreme Court. One being Commerce Clause, and the other being nondelegation in the way that the new rule is written. The 1986 regulations had a provision regulating "other waters" and it didn't fit the definitions in the other categories but broadly regulated any waters that could be implicated by sort of the outer third ring Commerce power that it was articulated by the federal courts through the 20th century. And it was one of those -- an elaboration on that, the Migratory Bird Rule, that the Supreme Court refused to allow in SWANCC. And in SWANCC, there's an important discussion about both the Tenth Amendment and what's called the clear statement rule for the exercise of the outer limits of the Commerce power.

 

      The new regulation limits itself to the Scalia and Kennedy tests from Rapanos, and it is probably not an enormous difference in terms of what will actually get regulated on the ground, but doctrinally, it's a walk away from the Clean Water Act being an exercise of the broadest scope of the Commerce power. It repudiates a couple of the floor statements by the conference managers that are frequently cited in the circuit court opinions, and so I think that that reflects growing awareness that the Supreme Court is thinking much more closely about the breadth of the Commerce power.

 

      The other is delegation. If you look at the definition in the new rule of “significantly affect,” it's got factors and—I forget the other word—but it's got two categories of things that the Agency is supposed to look at.

 

Kevin Minoli:  Functions.

 

Tony Francois:  But the --

 

Kevin Minoli:  Functions is the other category. Factors and functions.

 

Tony Francois:  Yeah. Functions and factors. And those map pretty clearly to use some of Justice Gorsuch's writings in some of his opinions about what kinds of things need to be there or statute to -- or regulation, in this case, to survive either vagueness or nondelegation scrutiny. The agency and its staff need to have types of facts that are important and guidance on how to weigh those facts. And I think, in part, that's what you see in that definition of “significantly affect,” and so I think that's -- for example, set aside the doctrinal question of whether you can cure a nondelegation problem in a statute with a regulation. If you take the regulation as sort of filling in those details, I think that insulates it pretty well from a non-delegation challenge. And I think that just reflects that the current sort of architectural interest at the Supreme Court are finding their way into agency practice and affecting the way that regulators think about their authority.

 

Kevin Minoli:  And then this rule is clearly written in large part by lawyers—or at least the preamble particularly written by lawyers—and I know the folks who worked on it. They're all brilliant lawyers, and so they are thinking about those things. And they've been -- they're not just thinking about the district court. They're thinking about what the Supreme Court is going to need and look for and the like. So I do agree with you that the influence is there, and the attempts -- some of these changes are attempts to try to speak to what they think the justices are going to require.

 

      Shall we take a look at some of the questions that have come in? So maybe I'll read the first one, and we'll see which one of us wants to answer it. The question is, "Did EPA's failure to rescind or amend the 2019 WOTUS rule further muddy the water for the recently promulgated WOTUS rule? Although the 2019 rule is substantially similar to the U.S. Army -- the EPA Army WOTUS rules from the 1970s, there are wording, text, and organizational differences."

 

       I don't know that it -- I would say, at this point, I don't know that it muddies the water very much because this rule would have supplanted whatever was in existence beforehand. And so, I think there may have been that period in which the agencies were treating the Navigable Waters Protection Rule as having been vacated where there is some confusion—or could have been some confusion—about what rule is really in place or what standard was really in place. But I think now with the new rule that resolves that.

 

      The one way that it could come into play would be if somebody had alleged that the economic analyses and those other things that the agencies are required to do looked at the wrong baseline because it presumed that the 2019 rule was not there when it really was. But I think, as this notes, the 2019 rule is not significantly different from what the practices were prior to 2015, and so it's more likely that this is probably not going to make a difference in my [inaudible 46:31].

 

Kevin Minoli:  I think it's more doctrinal than practical, but there is kind of a nesting doll effect that's accumulated since 2015. One of the red-state challenges to the 2015 rule is still pending in the District of North Dakota with a every six-month status report over the concern that if challenges to subsequent rules result in that rule being vacated, at some point, you may actually collapse back to 2015 rule as the status quo.

 

      Most of those cases have been dismissed by now, and I think as a practical matter, I mean the courts are not going to -- it's like blockchain technology, right? There's just too much energy involved in ripping off the top block to get to the one below it. And I do think, though, that it would be salutary for the agencies of whatever administration to just stop rulemaking long enough for some of these substantive issues to get litigated.

 

      For those who are interested in kind of this aspect of the problem, there's a remarkable oral argument you can find on the Ninth Circuit's YouTube channel argued last fall in American Rivers v. American Petroleum Association over the Trump administration's 401 Certification Rule. And similar to Kevin's description of the single district court vacatur of the Navigable Waters Rule, there's a district court vacatur of the 401 Certification Rule that the Supreme Court then stayed on the shadow docket. And now they're litigating what's the actual status quo in the Ninth Circuit where the plaintiff environmental organizations want to litigate the merits of the case. They don't want the case dismissed and the rule vacated based on EPA's repudiation of the rule with change of administration.

 

      And the argument is just some fascinating administrative law conundrums because, at a certain point, like Kevin said, you do get this uncertainty about what the baseline is from which agencies are doing their environmental analysis, their economic analysis, even if it is vacated, whatever it reverts to, and as a practical matter, though, I think, basically, nobody -- for example, when the 2015 rule was stayed, EPA just announced what it was going to be doing instead, and nobody really challenged that, and in practice, that is just what happened. And I think that's probably the way it's going to work out.

 

Kevin Minoli:  Yeah. I mean, it's interesting because whether the agency can just articulate, "Okay. We're going to do this instead," that in and of itself is something that probably should go through rule-making order to get something, but it's -- the real challenge is brought on those sort of statements on the interim for whatever reason.

 

      I know that I was -- at the change from the Bush administration to the Obama administration, I was a water attorney then, and one rule that was challenged that was sort of in that -- affected by the change in administrations was the Stream Buffer Zone Rule, which deals with mining and how close you can come to streams. And in that rule, the government, we went in and said we professed error that we had not confessed error. We did not consult the Endangered Species Act. We asked the Court to vacate the rule, and the Court said no. They can't do that.

 

      And so, it's interesting to see eight years later, 12 years later, courts -- at least a few courts didn't have any problem vacating the rule. The Court's reasoning in the Stream Buffer Zone Rule case was that you can't do -- the government can't ask the Court to do what it couldn't do itself without going through the rule-making process, and so it was going to force the government to go through rule-making process to withdraw something that was promulgated appropriately.

 

      Turning to another question here, there's a question about did the panelists have any comments on the severability clause and that EPA included in the water's definition a rule appears to be directed at a potential ruling in Sackett 2.

 

      I mentioned that severability clause a couple times, but I'd be interested to know your thoughts on it, Tony, whether you think courts will adopt it or not or whether it was necessary.

 

Tony Francois:  Well, one of the things that -- at Pacific Legal Foundation we've focused on in the litigation for the clients that we represented in the facial challenges to the 2015 rule as well as defense of the 2020 rule—we also represented clients that were challenging parts of the 2020 rule—is that we tried to focus on particular parts of the regulation, and the injunctive relief we asked for was targeted at particular parts of it. And then we didn't really argue that it was not severable.

     

      I have been kind of curious. I don't know that there's a good answer to it, but it has seemed to me -- there's been Congressional pressure on the agencies to wait until the Sackett ruling is out before adopting a final rule. It has seemed to me risky for the agencies to basically adopt both the plurality and the concurrence from Sackett—or from Rapanos—and risk the Sackett decision essentially excising the concurrence version of the regulation and just leave the fairly narrow Rapanos plurality definition for both adjacent wetlands and tributaries. And I've been curious what the agency's strategy for that will be if that's the outcome of the Sackett case. But the fact that they've got another rule-making plan for later this year is probably kind of what they plan on doing in any event.

 

      But I think that the severability approach is perfectly appropriate. I mean, the way that the -- the way that the agencies have always structured this definition of their authority is like -- well, it's a water system, right? I mean, the main trunk are the traditionally navigable waters. Then as you go farther up the watershed, you've got these different connections that are established to bring into regulation other things that aren't traditionally navigable. And I don't see any problem with saying, "If this part of it -- if that connection is not found valid, well, the rest of it has its own criteria for being connected to the traditional navigable waters." And if that's not challenged, there's no reason to disturb that.

 

      So I mean, to me, that makes a lot of sense, and again, I think that's one area where the factual development in the declarations and the showing in the various efforts to get injunctive relief against these rules at each iteration has been—I mean in my view—relatively thin and that it probably helps the agency quite a bit to be able to say, "Well, here's the five or the seven categories that are regulated. Of them, four are unchallenged by any of the declarations and any of the briefing." And I think it's a pretty hard argument to make for this type of regulation that if the wetlands at the outer edge of the watershed can't be regulated, then none of it can.

 

Kevin Minoli:  I would agree with that. And like I had noted, that when the SWANCC decision came down or when the other decisions came down, that sort of reigned in—Rapanos decision—reigned in the authority, no one treated the other provisions of the definition as being similarly invalid or similarly restricted. It wasn't just because the Court had opined on certain aspects of the overall regulation.

 

      I do think, though, that you've alluded a couple times to the areas of agreement or areas that are less controversial, and I know that—at least I advocated at the beginning of the administration—that they not simply scrap the old rule in its entirety but rather identify where they want to build on it or change it and try to sort of -- try to find a place where at least some of this rule stays in effect more than three or four years because it's not good for anyone to have this amount of change every three or four years because even if you like one perspective over the other, you can't depend on it. You can't rely on it. You can't make business plans and business decisions about what it's going to be in four or five years if this keeps up like this. And so, this could be an attempt to try to also slow the pendulum down or at least how big the pendulum is when it swings back and forth. Whether or not a court will agree to it or not, remains to be seen, but I think you're right. It hasn't been that way prior. It hasn't been until 2015 that we had these full roll vacaturs in this context, and so it'll be interesting to see what courts do with it now.

 

      We have a couple more minutes. Let's see. Taking a question here. "Please speculate on how Sackett and the compositions of the district courts since 2016 may continue to erode or to limit federal jurisdiction beyond Clean Water Act and perhaps beyond the EPA." You want to take that one?

 

Tony Francois:  I'm not sure. I mean, the original -- the first Sackett decision had to do with the availability of judicial review of an EPA administrative compliance order. That was followed by the Hawkes decision, which came to the same conclusion, both unanimously, on judicial review, it being available, of approved jurisdictional determinations. Both of those decisions have ultimately, I think, had a fairly broad effect in administrative law generally and the types of agency determinations that are reviewable and when they're reviewable.

 

      The Clean Water Act -- I mean, my view is that the structure and the text of the Clean Water Act are quite different from, for example, the Endangered Species Act, and so while in practice, there's a lot of overlap there. And I mean, one of the practical issues with, for example, a more restrictive definition of adjacent wetlands is that frequently the need to get a federal permit to discharge into federally regulated wetlands is the gateway to Section 7 consultation under the ESA because of the reach of critical habitat that includes those wetlands. But if you're just looking at straight-up legal questions about the text of the statutes, one, the Supreme Court's been much more interested in the Clean Water Act than it has been in the ESA much to the chagrin of -- I'd take an ESA case for every three tax cases or patent cases that the Supreme Court does, but they're going to keep doing the patent cases I think.

 

      So I don't know that there's a lot to read out of whatever the Court does with Clean Water Act and Sackett into other federal statutes.

 

Kevin Minoli:  All right. And then maybe just one last one real quickly at the last minute. The question is that Tony, that you had mentioned the government's loss of significant nexus on contiguous and neighboring waters rather than adjacency. Rapanos Kennedy does appear to apply the significant nexus test to determine if a water, in general, is a WOTUS regardless of adjacency and then adds adjacency as another way a wetland could be a WOTUS. However, much of the litigation in the circuit court decisions in interpreting Rapanos treat significant nexus as an adjacency test. Why is there this disparity?

 

Tony Francois:  Well, that's an interesting question, and that's one of the reasons I called that out from the argument in Sackett is EPA's emphasis that these are separate parallel definitions of the reach of their authority.

 

      My recollection of the 2015 rule—I don't have it right in front of me—is that it used the significant nexus concepts to define adjacent for adjacent wetlands. So that may be one source of that. I don't recall off the top how that was expressed in the 2007 Rapanos Guidance, but that may be a source of it as well. But it's quite clear the agency's view of it now is that adjacent—and that definition of adjacent is including neighboring—is, in their view, not limited by the presence or absence of the significant nexus concept and that there -- if you want to look at the Sackett briefing, there's some discussion about how these two things operate side-by-side.

     

      So I think that may just have been some period of time of agency practice kind of assuming that these kind of meant the same thing. It may also just be that the plurality is very focused on this is how adjacent a wetland has to be for it to be regulated as an adjacent wetland. And Justice Kennedy's opinion seems to be trying to answer the same question, and so I think -- I mean I would say for a long time I read it as some kind of substantive content to the term adjacent.

 

Kevin Minoli:  Yeah. It's interesting because in the 2007, 2008 Rapanos Guidance we viewed it as, if it was adjacent to a traditionally navigable water, significant nexus or the Rapanos really didn't apply or didn't restrict you at all. And so that could be where this -- the genesis of that -- the significant nexus test not being relevant to adjacent wetlands in that same way. But we always viewed -- the Guidance always viewed that the significant nexus test was for wetlands and other things that were adjacent to waters other than traditionally navigable waters, so your upstream tributaries and the like.

 

      I know we're out of time. There we go. Jack's going to come back and wrap us up here.

 

Jack Capizzi:  Sure. Well, thanks a lot Kevin. And on behalf of The Federalist Society, I want to thank our audience for attending and Kevin and Tony for their valuable time and expertise. As always, please keep an eye on our website and your emails for any announcements about upcoming webinars. And lastly, we do welcome listener feedback by email at [email protected].

 

      Thank you all for joining us today. We are adjourned.

 

 

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