One of the longest-standing environmental law challenges is how to define the scope of waters regulated under the Clean Water Act known as “waters of the United States” (WOTUS). After decades of regulatory uncertainty, the Supreme Court has again taken up a case that may provide clarity. On October 3rd, the Court will hear oral argument in Sackett v. EPA, the first case of this new term and the second time the case will be reviewed by the high court. Perhaps this time the Court will definitively determine what is a WOTUS. Will the Court definitively determine what is a WOTUS?
Join us for a discussion on this important case with Damien Schiff (arguing for petitioners), Tony Francois (represented petitioners in the Ninth Circuit), and William Snape (Director of the American University Washington College of Law’s Program on Environment and Energy Law). The panel will be moderated by Hunton Andrews Kurth partner Matt Leopold, who served previously as EPA general counsel and assisted in drafting the 2020 Navigable Waters Protection Rule defining WOTUS.
Tony Francois, Senior Attorney, Pacific Legal Foundation
Damien Schiff, Senior Attorney, Pacific Legal Foundation
Prof. William Snape, Director of Program on Environmental and Energy Law, Assistant Dean of Adjunct Faculty Affairs, and Fellow in Environmental Law, American University Washington College of Law
Moderator: Matt Leopold, Partner, Hunton Andrews Kurth
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As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.
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Jack Capizzi: Welcome to today’s Federalist Society virtual event. Today, on October 4, 2022, we are excited to present our Courthouse Steps Oral Argument’s event on Sackett v. EPA. My name’s Jack Capizzi, and I’m an Assistant Director of Practice Groups at The Federalist Society. And as always, please note that the expressions of the opinions are only those of the experts on today’s call. After our speakers have given their remarks, we will turn to you, the audience, for any questions you may have. If you do have a question, please enter it into the Q&A function at the bottom of your screen, and we will handle those as we can towards the end of today’s event. With that, I’ll hand it over to Matt. The floor is yours.
Matthew Z. Leopold: Thank you, Jack, and thanks for The Federalist Society for hosting us today. My name is Matt Leopold. I’m a Partner with a law firm of Hunton Andrews Kurth. And I’m pleased to moderate today’s panel of environmental law experts to discuss the Sackett case, which was argued yesterday as the first case in the Supreme Court’s 2022 term. Today, I’m joined by three distinguished guests who will offer insight and shed light into the oral argument and their views of, perhaps, how it might come out.
First, I want to welcome Damien Schiff. Mr. Schiff is a Senior Attorney at the Pacific Legal Foundation, and he was Counsel of Record in the first Sackett case as well as argued yesterday in Sackett II. Mr. -- in addition to his significant Clean Water Act expertise, Mr. Schiff practices in direct litigation in friend-of-the-court briefs and under federal and California Endangered Species Acts as well as other environmental laws. And he’s frequently appeared in well-known publications, such as the The Economist, New York Times, and Wall Street Journal. He obtained his law degree cum laude from University of San Diego School of Law and undergraduate from Georgetown.
Next, we have joining us Professor William Snape. He is a Practitioner in Residence and an Environmental and Energy Law Fellow at the American University College of Law. He has litigated a number of environmental and related cases in federal court, including the Center for Biological Diversity v. Interior at the DC Circuit, which rejected the federal government’s plan for oil and gas drilling off the coast of Alaska, in part, because of climate change concerns. He publishes frequently and also serves as General Counsel to the US Climate Action Network. He’s a cum laude graduate of the Honors College at the University of California, Los Angeles, and a law degree -- with a law degree from George Washington.
Finally, we have Tony Francois. Tony is an experienced water and real property lawyer, specializing in environmental regulation and natural resources and constitutional law. He represents home builders and farmers and ranchers, among other clients, and he’s appeared and litigated in federal courts around the country and also the supreme courts of a number of states. Tony was an attorney at the Pacific Legal Foundation from 2012 to 2021, and he’s a graduate of University of California Hastings College of Law and the University of San Francisco. So thank you, gentlemen, for being here today.
I’m going to get to questions real quickly, but before we do, for those in our audience who may not be familiar with the facts of this case, I’m just going to give a brief factual and procedural history. So Sackett -- the Sackett v. EPA case is fairly unique, having made two trips to the Supreme Court in now ten, so, one in 2012 and again this year. And the brief facts are Michael and Chantell Sackett own a two-thirds acre residential lot in Bonner County, Idaho. Their property lies just north of Priest Lake but is separated from the lake by several lots containing permanent structures. And in preparing to construct a house, the Sacketts filled part of their lot with dirt and rock, and then some months later, they received a compliance order from EPA. According to the EPA, the Sacketts’ lot contained wetlands that qualify as navigable waters under the Clean Water Act.
And, so, they were ordered to remove the sand and gravel and to restore the property to its natural state. Litigation ensued, and in 2012, the Supreme Court agreed that the Sacketts could EPA’s administrative order in federal court contrary to the EPA’s contention that the order was final -- nonfinal and nonjusticiable. After a remand, the Sacketts had an adverse decision in trial court and appealed to the Ninth Circuit. And the Ninth Circuit found, despite EPA having withdrawn the compliance order in the Trump administration, that it did not render the challenge moot and that the EPA does have Clean Water Act jurisdiction over the property as WOTUS or waters of the United States. The Supreme -- the Ninth Circuit’s reasoning was that, under circuit court precedent, Justice Kennedy’s concurrence in the 2006 case of Rapanos v. United States was deemed the property jurisdictional as there was a significant nexus between the wetlands in question and the navigable waters in Priest Lake. The Supreme Court then granted certiorari on the question of whether the Ninth Circuit set forth the proper test for determining whether wetlands are waters in the United States under Clean Water Act.
So after two failed attempts by the EPA to promulgate rules defining WOTUS, many speculate that this case might finally bring clarity to a decades-long legal and regulatory battle. So with that, gentlemen, I’d like to begin just by giving you the opportunity to share your thoughts on this case. So, Damien, as the attorney presenting the oral argument, I’ll give you the first opportunity.
Damien Schiff: Thank you, Matt. And thank you to The Federalist Society for hosting the webinar this afternoon. One takeaway, I think, from the argument is that the justices are unhappy with the status quo. I didn’t sense that anyone was particularly desirous of defending the EPA’s employment of the significant nexus test, in part, because it has proven to be a difficult test to administer for the agencies. It’s proven to be a difficult test for the regulated public to employ to know with predictability whether their property will be regulated. It’s also been a test that has resulted in limitation of a lot of use of private property as the Sacketts’ case exemplifies.
So, in that sense, I think the Court wants to come up with something different. Now, I think it’s also true that there are a number of justices who are not particularly satisfied with the “something different” that Justice Scalia came up with in his 2006 plurality opinion in Rapanos. And that, then, makes it much more difficult to guess as to what type of answer the Court will give. Certainly, the -- say, Justice Thomas, Justice Alito, I think, maybe the Chief Justice as well, as they all signed onto that plurality opinion in 2006, I think they’re still, by and large, in agreement with that decision’s analysis, which is basically that a wetland on its own is not a water and thus can only be regulated to the extent that it blends into and becomes indistinguishable from the water. But I think that Justice Kavanaugh and Justice Barrett, to varying degrees, are a little concerned about that test and perhaps may be thinking that there is, in Justice Kagan’s words, at least, a third way that would not be the significant nexus test but would be something a little different from what Justice Scalia set forth in his plurality opinion.
And then, I guess, my last segue is just that it was an incredibly long argument, and I think that was a little surprising because the subject is significant for environmental law advocates and for those interested in how environmental law affects private property rights, but it’s not really a case that has broad public appeal on its face and, yet, nevertheless it did attract quite a lot of attention from the justices. That might have been, in part, simply because it was the first case of the term and also the first one argued in person after several years. But, nevertheless, that was a little surprising and, I think, just emphasizes that the Court is concerned about the WOTUS wars over the last 16 years but is not 100 percent certain as to how to resolve that warfare.
Matthew Z. Leopold: Thank you, Damien. Professor Snape?
William Snape: Well, hello, everyone. Thanks for having me. Congratulations, Damien, impressive one hour before the nine justices. I want to start with three things, and I’ll try to a little bit respond to what Damien just said. But I want to, as he did in his opening remarks, take a slightly higher altitude. The first is, as Tony and Damien both know — and as I was getting ready for this discussion, “What a long, strange trip it’s been,” said the Grateful Dead -- or sang them — and I think both can agree what a journey it has been for those, like the two of my fellow panelists, who have been so involved in this battle for more than a decade.
Secondly, I thought it went better for EPA than I would have originally thought. For those who don’t know me, that makes me happy in general. I can get more into that later. And then, my third point is but we’ll see. Reading tea leaves from oral argument is always dangerous. Despite what I think is the clear legislative intent, which I think is consistent with the Ninth Circuit’s decision, I think Damien’s right. I think questions about line drawing persist.
I think questions about overzealous governmental authority still exists. And, so, who knows how that will play out as the weeks and months -- I predict this will likely be a June opinion, but, anyway, we’ll see. I think it’ll take them a while to hammer all this out. But I guess, ultimately, I think that the line drawing particularly is always going to be hard. I think it’ll be hard in 100 years, 200 years. I expect a narrow decision. We’ll get into that more later. I don’t think this will be the sweeping Clean Water Act decision. I think they’re going to look for ways to keep it relatively narrow.
Matthew Z. Leopold: Thank you. Tony?
Tony Francois: Thanks, Matt, and thanks to The Federalist Society for including me today. It’s an honor to join the other panelists. I was struck by how little the argument seemed to focus on either of the tests, as such, in the prior Rapanos decisions. Since Rapanos was a four-vote plurality opinion for a fairly narrow reading of the Clean Water Act coverage, and then Justice Kennedy’s more expansive but still somewhat, certainly relative to prior Agency practice, somewhat more restrictive reading of it. Since 2006, those have been the two legal standards that have been involved in the Agency’s effort to apply that opinion, the regulated community’s effort to comply with the law, the Agency’s effort to enforce the law, and the -- particularly, a lot of the arguments in the lower courts over this issue over the last several years have been about which of those two opinions the lower courts should apply. And then the Agency’s seriatim rulemakings have really focused on that as well.
Given all that, I really did not hear much support for the significant nexus test, as such, during the argument. At one point, Justice Kagan asked, I think, both sides, “Let’s assume we don’t like the test that the Sacketts have proposed. Let’s assume we don’t like the significant nexus test. Is there a third way?” I think she literally asked Damien at one point. So the cert petition that we filed said, “Would you like to resolve the 4-1 split in Rapanos?” And the reframe question that came back is, “What’s the right standard?”
And, so, despite the fact even that three members of the Court are still on the Court who signed the plurality opinion, even they didn’t really seem to focus on whole lot on the plurality opinion from Rapanos as a point of attack against the Solicitor General. So I think it’s going to be an interesting outcome. I agree with Damien that the three signers on the Rapanos plurality all seem pretty confident where they want to go. Justice Gorsuch was particularly aggressive on things like notice, line drawing, and he seems to be heading in the same direction. But it’s very hard to read both Justice Barrett and Justice Kavanaugh where they’re headed on this and, indeed, really even Justice Kagan. It’s just not clear what her third way, whether that -- however many votes that draws will be formulated.
Matthew Z. Leopold: Yeah, I found that striking, too, that many thought there might be five votes for Justice Scalia’s plurality opinion coming out of this case. But hearing yesterday, does anyone still think that the plurality in Rapanos case might be the prevailing test coming out of this decision?
William Snape: It seems unlikely, and I’m not sure they have the Chief Justice anymore. I’m not convinced of that. I don’t know, but I think -- I agree Gorsuch sounded like he was in that camp with Alito and Thomas, but that may be it on the Rapanos plurality.
Matthew Z. Leopold: And, I guess, another important question. At one point, Justice Kavanaugh said, “This is going to be a decision that is important for wetlands throughout the country.” That seemed to indicate, at least from his point of view, that this would be a broad decision. Thoughts on where the Court might be heading in terms of a broad or narrow approach?
William Snape: Well, I’d love to hear Damien answer that because he was there in the thick of it. But I actually read Kavanaugh’s comment there perhaps another way, which was this could have huge ramifications. I want to get it right, which I think leads to my conclusion that it -- this may all be about adjacency. We may not even get to the larger nexus issues, but I’ll let Damien give his perspective.
Damien Schiff: Yeah, I think the argument -- in answer to Matt’s original question, just based upon the tenor of the questions, I don’t think that there are clearly five votes simply to codify Justice Scalia’s opinion, as such. And I think that there was some concern, in particular voiced by Justice Kavanaugh — and to some extent, too, I think by Justice Kagan — about the idea that, even under the Trump administration’s Navigable Waters Protection Rule, that some wetlands that otherwise would be distinguishable from abutting waters might nevertheless be regulated because they’re only separated by a natural or permeable berm or what have you. And, so, when I responded at that point, if I recall correctly, to say that, “Well, for the Sacketts, that’s not really an issue because their lot is bounded by developed roads,” I think at that point he then said, “Well, but we’re trying to develop something that’s going to be broadly applicable,” or words to that effect.
So I do think that they want to craft a general rule for wetlands jurisdiction. And my sense is that they want to be more restrictive than what the significant nexus test has allowed. But my second point is just that there was some confusion at the argument about this notion of adjacency because -- both because the definitional text that was quoted in the question presented and that the parties focused on doesn’t mention adjacent. And that term is found in a separate section of the Act, but, at that same time, the Agency’s regulation that interprets waters of the United States and what adjacent means that doesn’t really import -- that doesn’t purport to interpret this reference to adjacency in Section 404(g) of the Act. It’s actually a regulation that purports to interpret just waters the United States.
And, so, I think my thoughts are not 100 percent well formed on this, but I think part of the confusion might be is that you have some of the more conservative justices who are more textually minded, who feel like perhaps there might be something that needs to be tweaked with Justice Scalia’s test, but they’re trying to find a textual reason for tweaking it. And they’re hitting upon this idea that in 404(g) there is a reference and a parenthetical to wetlands adjacent thereto. And I think they were trying to find a way in which they can satisfy their desire to tweak the Scalia test but, at the same time, respect the text. And I think they were getting befuddled by the fact that the Agency’s position is really that this 404(g) reference is kind of, sort of icing on the cake, that their approach is not being driven by that. So there was some methodical confusion created by the fact that you have jurisprudentially conservative-leaning justices who are at the same time trying to maybe incorporate a little more of an environmental-sensitive test, and I think that that was -- that led to some confusion on the bench.
Matthew Z. Leopold: I have a related question from the audience on this point, and it is, “Are the justices conflating Rivers and Harbors Act, Section 10, waters and adjacent wetlands for that purpose and Clean Water Act, Section 404, waters?” Any thoughts, anyone, on that?
Tony Francois: I would say that’s a -- it’s very difficult not to conflate, in a certain sense. Part of that is just a lineage of the term now, the waters of the United States, and then the way the Clean Water Act separates that into two different phrases, one in the operative section and then another in a definition. And yet, the -- a lot of the controversy of the Clean Water Act is how big or small a deal is that separation in the two parts of that phrase in the different pieces of statute. And, so, in a certain way, you’re always going to start from a standpoint of Rivers and Harbors Act waters is this geography here. Even the evolution of the term, TMW to refer to -- because it’s easier than saying the Rivers and Harbors Act waters, reflects the fact that even if you take the view that the Clean Water Act redefined waters of the United States is a different term of art. It is a practical matter that’s -- and really is a matter of legal analysis.
It’s always going to, then, roll you back into -- well, you start with the Rivers and Harbors Act waters and then you figure out how far out you move from that. And then the -- I would say that there’s pretty clear cross-reference in 404(g) to the Rivers and Harbors Act waters. I think one way of reading the adjacent wetlands parenthetical in that delegation is that it’s not so much a definition of waters in the United States, that they necessarily include adjacent wetlands, but that, as to the things that the Army Corp is going to continue regulating directly, states will not be allowed to permit the fill of wetlands adjacent to those waters, that that’s something that’s going to be reserved to the federal government as it needs to. So I’m not sure there’s anyway to disambiguate those. I think that they’re always going to be conflated to some degree.
William Snape: That was very well stated. I agree with everything you just said.
Matthew Z. Leopold: Yeah, we’re hitting on --
William Snape: That’s it.
Matthew Z. Leopold: I’m glad we solved that one. Well, we’re starting to get into, I think, what I saw as one the features and frequent themes of the argument, which was around Section 404(g). Professor, what did you make of the questioning around 404(g), and how might that influence the outcome?
William Snape: Yeah, I thought that was fascinating. Many justices referred to it. I thought Justice Barrett’s question and point was particularly noteworthy, just because who it was coming from. And what I heard her to say — I haven’t looked at the transcript yet — but she essentially said that, if you cut out adjacent wetlands, the way that’s worded, it’s a doughnut hole situation where you say the feds can’t regulate it and, by virtue of that section, nor can the states because of the way it’s worded. And she was very troubled by a reading of that.
So I think this gets to my — and I’ve already alluded to it — I think it’s quite possible -- I hear what Damien’s saying, and I see a scenario where he might be right. But I think the more plausible end result here is the Chief Justice negotiates a Maui-like solution, and they just focus on adjacency and leave the larger questions that Tony just sort of laid out of how challenging they are, and big, for a later day. And I think a big part of it is going to be -- Section 404(g) is going to be a big part of that, for sure. I think that’s where EPA did well.
Matthew Z. Leopold: Do others agree that this case could be resolved on adjacency alone, or do they have to get to significant nexus?
Tony Francois: In questioning from Justice Barrett, the Solicitor General’s office affirmed that they need both the adjacency standard and the significant nexus test in the posture of the case in front of the Supreme Court. And that’s -- to unpack that a little bit, the Sacketts’ lot is 300 feet from Priest Lake, and there’s an intervening road and row of houses. And then, in the other direction, it is 30 feet from a roadside ditch. And, so, it’s separated from a roadside ditch by the road, and there’s no service connection between either the ditch or the lake and their property. And, so, under the -- trying to figure out if there’s a way to actually simplify this. It's emblematic of the difficulty that the significant nexus test has introduced into all of this.
The jurisdictional determination was twofold by the Agency and advanced in the lower courts, that it was adjacent to Priest Lake directly and that it was -- and, therefore, did not need a significant nexus analysis because it was directly adjacent to a navigable lake. And in the alternative that it was adjacent to the ditch across the road, which is not being a navigable water body, required a significant nexus analysis. And as the case progressed through the lower courts, the Agency only advanced its theory of adjacency to the ditch and, therefore, required a significant nexus analysis. So as the case sits in front of the Court, and this is what Justice Barrett confirmed with Mr. Fletcher from the Solicitor General’s office, to affirm the Ninth Circuit, the Supreme Court is going to have to retain the significant nexus test. If it jettisons the significant nexus test, it cannot affirm the judgment below unless on another theory that the facts warrant.
So I think they’re going to address significant nexus probably by saying, “That’s just not what we’re going to use anymore.” But then I agree with Professor Snape to the extent that, if there is a third way that Justice Kagan can garner four more votes for, that’s just going to raise a different set of questions. But they might be easier questions to answer for the agencies, for regulated communities, for the courts. That’s really a possibility. The discussion about using subsurface connection as the basis for that test I don’t think holds out the possibility of an easier-to-administer test. So I think we’re now all waiting to see.
William Snape: Yeah. Thanks for that, Tony. Before I let Damien hop in, just one P.S., which is I think it’s also -- and I agree with largely, again, what you said, Tony, that more than one justice was interested and began to realize the potential significance of the fact that the administration does have a proposed rule at OMB right now on these very issues, that -- I don’t know how the Court ends up dealing with that. It could go a couple different ways, but there was definite -- it was repeated more than once that that was indeed the fact.
Matthew Z. Leopold: I think that’s a great point, and one that I wanted to raise is, if EPA attempts to finalize its proposed definition, codifying the significant nexus test prior to the Court ruling, what would occur? And doesn’t that potentially cause more litigation in that?
William Snape: Doesn’t seem like they’re going to finalize it before this opinion, but maybe I’m naïve. I don’t think that -- I think they’re going to wait.
Damien Schiff: If I could just -- before addressing that part of it, just go back to the question of adjacency. I -- again, this is kind of the source of confusion because I think what some of the justices were indicating was that the frame of reference for whether wetlands should be regulated should not be the line drawing rationale that Justice Scalia extracted from Riverside Bayview but rather the fact that the only place in the statute where it seems like Congress contemplated the regulation of wetlands was 404(g) where there’s a reference to wetlands adjacent thereto. And, so, they want to develop a test of adjacency in that sense but not necessarily in the terms that EPA and the Court have independently defined adjacency in interpreting what waters of the United States means.
See, this is the confusion is that this regulation that says that we can regulate adjacent wetlands antedates the text in 404(g), and it purported to interpret just simply the original definitional text in 502, the waters of the United States. And then, I think, maybe, say, Justice Kagan would argue that, well, the 77 amendments essentially codify that understanding -- that broad understanding of adjacency. But I don’t think that that would be shared by a majority of the justices. And, so, I think, if there’s going to be a third way, I think it would be textually based upon this reference to wetlands in 404(g), but I don’t necessarily think that it means that the agencies as they have interpreted it is necessarily the answer.
But with respect to the rulemaking, yeah, I think that was an attempt — I think Justice Kagan mentioned it towards the end — I think it was an attempt for her to maybe buttress what seemed to be EPA’s flagging defense at that point, that they can administer the Act in a way that provides notice and that’s fair and all that. And I think she was hoping that there might be some guidance in that rulemaking. But the reality is that the rulemaking, at least as proposed, essentially just codifies the status quo immediately after Rapanos was decided. And moreover, at the argument, the Deputy Solicitor General said that the agencies are just not interested in bright lines. And, so, I -- to the extent that the Court would be hoping for bright-line guidance from the rulemaking, I think it’s already been stated that that -- really that’s not going to happen.
Matthew Z. Leopold: Damien, I recall specifically a poignant moment when you used the phrase to apply 404(g) to interpret the definition of WOTUS as the tail wagging the dog.
Damien Schiff: I was just going to say, if you read the briefs in the case, 404(g) -- of course, it’s the argument the government has made in all these cases. It relied upon 404(g) in Riverside Bayview, in Swank, and in Rapanos. And really in none of those decisions was 404(g) that significant to the Court’s rationale. And, so, it was surprising that it was so prominent in the argument, and, again, the reason why, I think, it was so prominent is that if you are a strongly textualist-minded judge and you feel a little uncomfortable with the idea that the Clean Water Act might not reach a certain number of wetlands and you’re looking for a textually reason as to why maybe it’s not quite as narrow as, say, Justice Scalia thought it was, then you would necessarily hit upon really what amounts to the only significant reference to wetlands in the text.
And, so, 404(g) in the argument became almost abnormally significant, I think, abnormally significant, certainly from our perspective, but, again, also from EPA’s, which -- and even at the argument, the Deputy Solicitor General noted that they would make the same argument even if 404(g) didn’t exist, which, of course, is chronologically correct because they were making that argument before 404(g) existed. And, so, that’s one reason why I think it’s an indication that the 404(g) focus was more of a product from the right as opposed from the left of the Court because, again, it is really the only clear textual support, I think, that the agencies have for their traditionally broad understanding of wetlands jurisdiction.
William Snape: I realize that is Damien’s perspective, and it’s -- I think it begs the question, the central question, because I don’t think it is the tail wagging the dog here, and Tony alluded to this problem. He maybe doesn’t come to the conclusion I do, but the whole point of the term “navigable waters” means the waters of the United States was a purposeful punch by Congress to a certain extent, originally. It was debated and defined in those intervening five years particularly. They had begun, EPA, the process of recognizing that it couldn’t mean every single body of water in the United States, which we all know very well readily accept. And this came out, I think, yesterday that the whole process, since 1977, has been EPA continuing to try to figure that very difficult question out. And I think that’s why, when Justice Gorsuch and the Solicitor had that funny interchange — three miles, two miles, one mile, half a mile — this -- there is no right answer. And that’s the point. And I don’t think there ever will be an answer. I think that’s -- and that is very frustrating to landowners. I get that, but I don’t think that means that it’s the tail wagging the dog. That’s means that 404(g) is a way of adding some complexion and some narrowing of a term that we all recognize, and the definition is pretty broad.
Tony Francois: I do think, though, that on that point there are a number of interpretative tools, of course, used in prior Clean Water Act cases, pretty heavily in Swank, to address that exact problem that Professor Snape identifies, which is -- so there was this great exchange between the Chief Justice and the Solicitor General where the Chief was pressing for whether the Agency had ever offered a clear, more or less, bright-line rule. And the Solicitor General basically conceded, “We don’t really think that’s possible.” And then, the Chief follows up with, “Well, have you reduced it to a vague rule?” And that, I think, introduces things like Major Questions Doctrine, non-delegation, vagueness, principles that, even if the 404(g) question leaves them very little to answer how broad or narrow adjacent is, mainly Justices Barrett and Kavanaugh conclude that something a lot closer to the plurality is the only reasonable way to interpret the statute to avoid these other kinds of problems.
And I think Justice Gorsuch did a pretty good job of demonstrating that adjacent and neighboring a) are amenable of two different ways of looking at it: the touching type of adjacent or the somewhere nearby adjacent. And that the somewhere nearby adjacent approach doesn’t really give you administrable rules that provide the kind of clarity that a lot of members of the Court think are not just better policy but constitutional necessary, particularly the statutes with criminal penalties. So I think that, even if they begin with an effort to textually draw the boundaries around 404(g), adjacent wetlands, the members of the Court that aren’t quite prepared to say the Rapanos plurality is the right answer are still going to get drawn that way by these other principles. I also wanted to briefly mention, Matt, your question about the rulemaking. I have a tough time imagining EPA finalizing that rule before an opinion in this case.
William Snape: One hundred percent agree. Yeah.
Tony Francois: Yeah, because it seems very clear the significant nexus will not be an available standard for them to adopt in regulations. If they finalize this rule, they will then have Rapanos plurality and a significant nexus. Significant nexus will be illegal, and they’ll have adopted a rule that they then have to go through a rulemaking to change that adopts the plurality as the, more or less, the outer limit of their authority. And that’s, I think, not what they’re going to want to have done. And yet, they’ll have to go back to the beginning. If they want to do something that tries to take a stab at Justice Kagan’s third way, they’re going to have to recirculate a revised proposal for comment. I think that’s -- I can’t imagine that any -- many -- any court would allow that to go through as a reasonable elaboration on the proposal.
So I think it’s very unlikely at this point. I was expecting they would try to finalize before argument, and they’ve done that in a number of high-profile Clean Water Act cases. It’s never worked, and, so, that may just be -- what they concluded is that “This isn’t going to help us. We need to figure out what the answer is this significant nexus test or we’ll have stuck ourselves with the plurality, and we actually don’t want that as the only rule.”
William Snape: Well, of course, withdrawing that clean power plant didn’t help them in West Virginia, but they’re damned if they, damned if they don’t, I guess. I just wanted to respond real quickly. Again, I agree with a lot of what Tony just said. I agree to the extent this decision, delegation or nondelegation could enter into that for the reasons that I already stated, but I can’t believe I’m the one going to really bring this up, but the so-called Major Questions Doctrine, this little baby, infancy -- in infancy doctrine, is actually an interesting comparison here because this is clearly an area where EPA has been in the same lane, has been doing the same thing for 45 years. This is absolutely not new, not outside the lane. Congress has had ample opportunity to object if they wanted to, in fact, seemingly has endorsed on some level what EPA has done.
So I think by actually discussing why it isn’t Major Questions Doctrine, I think it actually shows you partly where this might go, which is -- I’m not sure significant nexus is dead but I agree that if I were the administration, I wouldn’t want to lead with it at this point. It has to be much better explicated that there are these number of factors that I think they actually have to enunciate. And I agree with Tony, from basic administrative law, if this is going to go administratively, they’d have to another proposed rule. I would tend to agree with that, if they’re going to majorly change what they’re doing based upon yesterday’s arguments -- or a decision.
Matthew Z. Leopold: We’re getting a number of questions from the audience, and it might be a good time to throw a couple of those out. One -- Professor William Snape referenced the Maui decision and the seven-factor balancing test that came out of that. Do you -- we saw Maui referenced in the oral argument yesterday. Anyone have thoughts on if -- could the Court go towards a Maui-type resolution of this, and does that complicate the issue?
Damien Schiff: I would -- I tended to think not only because the County of Maui was the first case on that issue, and, so, they’re going to try out to see if a significant nexus analog will work. And, so, I feel like the Court’s already had that County of Maui moment in Rapanos and took this case because it wasn’t satisfactory. So I would tend to think not. Certainly, we would hope that the County of Maui factor test wouldn’t be necessary here because the text doesn’t run out as quickly, so to speak, as it did in County of Maui, at least for the Chief Justice and for Justice Kavanaugh. And for what it’s worth, when it did come up, Justice -- the Chief Justice simply sort of distinguished it on its facts with respect to the EPA’s attempt to rely upon it, that it was, in terms of notice, that, well, that was a sewage plant, and, so, you sort of expect that type of land use to be a little more cognizant of potential legal ramifications, especially at the federal level, than you do with respect to just simply single-home construction.
But in the briefing, County of Maui was certainly something that came up with respect to the argument that, if the Court were to adopt the Sacketts’ proposal, that it would result in a significant amount of pollution no longer being regulated, and our response to that was, in part, well, the principle of indirect discharge that the Court adopted in County of Maui represents a sort of backstop to that argument and that it certainly wouldn’t recover everything that be deregulated by a narrowed interpretation of wetlands jurisdiction through the Sacketts’ case, but it certainly would account for some of it. And that it was a way of blunting, to some extent, the criticism leveled against the argument that we were advancing as to being so broad that, well, in fact, even with respect to the Clean Water Act itself, a lot of this might still be, in some form, ultimately regulated because of this indirect discharge theory.
Matthew Z. Leopold: Thanks. Another question that a few commenters have raised is, “Does anyone think the groundwater discussion, I think, Justice Sotomayor engaged in really is relevant to the ultimate outcome here?”
William Snape: I think it underscores how difficult it is to come up with a judicial solution to this at this point. I think that’s -- it is -- we would have different perspectives on this panel on how that Gordian knot ought to be dealt with, but there clearly are hydrologic connections. They’re clearly -- but there are -- just as there’s limits as to what surface waters are covered, I think there’d have to be limits as to what groundwaters covered. And I don’t think anyone is ready to offer a definitive rule on where that line drawing would be. So it just indicates how complicated the question, “What is waters of the United States?” actually is. It is -- yeah.
Matthew Z. Leopold: One of the things the Court was wrestling with was line drawing, and Counsel for the EPA struggled to answer questions about how to articulate a test, essentially how a landowner would understand their -- where the line is on their property. How much is that going to drive -- the reasonable person test going to drive the outcome here?
William Snape: Well, let me just start out real quickly, and I’ll let the two folks who I know will disagree on -- with me on this go next, which is I think had the Solicitor General offered a solution, that would have been ripped to shreds, no matter what that solution was. Absolutely, for at least a handful of the justices, he was damned if he did, damned if he didn’t. I think he was well prepared not to go down that road, was not going to go down that road no matter what because there is no one single answer. And as I keep saying, there likely never will be, based upon the ecological and other complexities of this site-by-site type of analysis. But I’ll let the others chime in on that.
Damien Schiff: Well, I -- in the -- the counsel for EPA was in a difficult situation because it is true that the significant nexus test is, by design, a case-by-case analysis. Now, what he could have said, I suppose, is something that even Justice Kennedy noted in his opinion, which is that by rulemaking, EPA could classify certain non-navigable tributaries are so -- as so significant that, if you’re adjacent to them, you don’t even need to a significant nexus analysis for them either, just as he would say with respect to adjacent wetlands for traditional navigable waters. But it is certainly true that when EPA did attempt in the Clean Water rule from 2015 to create these clear boundaries to the significant nexus test’s geographic reach, that was one of the reasons why several courts found the rule to be legally defective. And, so, there -- I don’t think that there was a good answer, certainly not -- I agree with Professor Snape. I don’t think there’s a -- there was an answer that would have satisfied the justices who were asking the question, but I do think, and this goes to something that Tony mentioned earlier, I do think that this -- and, of course, we’re advocates, and, so, we would want to hope that our side wins.
But I do think, to the extent that you have justices like, say, Justice Barrett or Justice Kavanaugh, who are sort of leaning one way or the other, I think these additional concerns about notice -- another thing that came up in the argument is the criminal penalties of the Act, which also turn upon the same jurisdictional text and federalism and the Clear Statement Canon, not necessarily Major Questions Doctrine but the idea that every work in the traditional federal balance requires a clear statement. All these things may be, on their own, may not be decisive, but when you start adding them up, I think it is relevant for a justice who is sort of sitting on the fence to lean more one way than the other. And maybe, perhaps as Tony suggested earlier, to accept something that perhaps is not super textually satisfying for a particular justice but, nevertheless, seems to get to the right result once you add in these other considerations.
William Snape: Damien, I thought that was very well said. And of course, I don’t end up where you end up, but I think there are -- so I agree that those dynamics are out there. And maybe the Chief Justice will be on your side because of those things. He clearly, I agree, is not embracing the EPA here. But I want to point out the facts and the dynamics that are on the other side of this that I think actually are against your position. One is just the fact the Sacketts never even tried to get a permit as far as I can tell.
Second is that your solution would have eliminated -- the Plaintiff’s solution would have essentially eliminated protection for wetlands and tributaries under the Act. And third, the Agency — rightly or wrongly, stupidly or not — has been doing the same thing for 45 years, essentially, based upon the direction of the Supreme Court in Rapanos, has been trying very hard to stay within what it thinks to be the lane it needs to be in, and I think that’s weighing on -- all three of those issues, I think, will bear upon sort of where the middle of this Court is and which way they lean because I think we agree. This is not going to be a nine-nothing decision. I think this will be a 5-4, 6-3 in one direction or another.
Tony Francois: Just briefly on the permitting point. The EPA’s conclusion — and it’s clear in the record, and I think this was actually communicated to the Sacketts — is that the EPA would not allow a permit to issue for this site because of its views a) that it was peat thin, and b) that the Sacketts own other property on which they could build a house. So as the case moved forward, permitting was really not an option nor is for a single-family home -- that’s not in Hamptons or some other zip codes. The cost of permitting would be difficult to bear in the economics of building a house. That said, the point about the availability of permitting is certainly more relevant to better capitalized projects. And, so, a lot of project builders are more comfortable simply understanding how the rules work in capitalizing the regulatory cost of wetland mitigation than fighting over whether they have to do the wetland mitigation.
So I tend to think that, even in practice, relief for the Sacketts is mainly going [inaudible 00:50:56] to the benefit of relatively, similarly situated property owners. The other thing that’s interesting and never came up at all in the argument, but I think is an important aspect of this, is that Justice Scalia’s observation in the Rapanos plurality that even if part of the tributary network were not directly regulated as waters under the Act, they’re still almost certainly and obviously point sources.
And, so, really what we’re talking about here are -- is the placement of fill, that point-source pollution that would -- if you had to have a NPDES permit to put it into a tributary, then under some more restrictive rule, we’re no longer directly regulated. You would still probably get an NPDES permit so that unregulated tributary didn’t subject you to point-source liability when it arrived at a regulated water. And I think a lot of point-source regulated industry is probably continued -- going to -- would continue to be preferred to have a permit a) because they’ve already had them and they know how to deal with them, but b) is the permit is a complete defense to a citizen suit or enforcement liability as long as they comply with a permit. So I tend to think that the scope of relief that a favorable ruling would offer really tends to [inaudible 00:52:32] to the benefit of smaller projects, private landowners that are not in regulated businesses, and the [inaudible 00:52:46].
William Snape: I just wanted to throw a cherry on top of what -- I accept what -- those are interesting pushback points. But the fact -- I think also the fact that the Sacketts knew about the EPA and core determination when they bought the property also, I think, is a factoid.
Tony Francois: No, they were not aware of that when they purchased it.
William Snape: Well, they should have been aware then because the prior landowners -- how is that that they didn’t know but the landowners had the notice?
Tony Francois: Well, they -- it’s not clear in the record whether they purchased from the person that got the prior jurisdictional determination, but they were not put on notice of it. The Army Corp’s library of site-specific jurisdictional determinations is not -- it’s a public record in the sense that if you know it’s there, you can FOIA it and get it, but they’re not publicly posted. They’re not readily available. They certainly are not revealed by a title search, so it leads you back to the fundamental question of notice. How is it that a landowner -- if you’re going to build a shopping mall or you’re going to do a phase two environmental assessment of it, it might come up. If you’re buying a vacate lot in a subdivision that’s built out, it’s not clear what puts you on notice that you might want to go check with the United States Army on whether or not they’ve said that it’s a regulated federal -- federally regulated water body.
So a lot gets made of the fact that there are prior determinations on properties. My experience in practice is that that’s a -- that is a factor that biases in favor of enforcement. That the fact that a prior owner had a jurisdictional determination done that the current owner was not aware of simply makes it a lot easier for the Agency to get an enforcement approved because they don’t have to go through the additional spade work of doing a determination on the property. And, so, you’re going to have, in enforcement cases, a much higher rate of “There was a prior determination on the property” than at a randomly selected set of properties.
William Snape: You’re a good trial attorney. Those are really -- I -- that pushback is effective, but I do still think -- let me rephrase it. I left yesterday’s hearing thinking that, however the nine are going to interpret it, that it was well established, that notice had gone to a prior landowner that this was a wetland, a water of the United States, that the house -- the proposed house, 300 feet away from a major lake. Three hundred feet is very close. Three hundred feet is very close. And before they did anything, they, on their own, just dumped, not a little bit of gravel, a shitload of gravel, enough to basically be able to put a structure on. And whether they did that in good faith or not, I’m just observing that that didn’t -- that doesn’t help.
I actually think that that’s going to -- it makes EPA look more reasonable in this instance, that they weren’t just coming down at the eleventh hour with a heavy hand and doing something new and irrational. That’s -- that was really my point. Your push -- your fact back pushbacks are all fair, but I still think that what I just -- that perception, that -- well, not perception, that story that was unrebutted yesterday, I think, is problematic for the Sacketts. I really do. I’m actually optimistic the EPA is going to win this. I’m not -- I wouldn’t bet you anything on it, maybe -- but, yeah. I --
Matthew Z. Leopold: So just in summary, that just was the US’s point that folks can go to the Army Corp if they have questions and ask. Admittedly, it’s difficult for untrained people to draw -- find the line between federal and nonfederal jurisdiction out in the field, and the US didn’t have a great answer on that.
Damien Schiff: Matt, could I just simply add because this came up on rebuttal. Justice Jackson asked a few questions on this very question -- on this very point of the Sacketts really have notice. And it certainly is true, as Tony’s says, that in the record there’s only the Sacketts’ testimony that they were not given notice from either a title search or from the county billing department, the sewer department, what have you. But setting that aside, the two points that I tried to make at the very end were that a) this jurisdictional determination from ’96, even if the Sacketts had been aware of it, would have expired several years before the Sacketts bought the property, so the Sacketts could not have relied upon it. If it had been, say, a negative jurisdictional determination, they could have never relied upon it. Moreover, it was decided, of course, before Rapanos, so the jurisdictional theory that might have underlain that determination also would have been passé.
Now, I take Professor Snape’s point that it would have had, if they had known about it, it would have had some relevance to the question of maybe there’s a scientific or wetlands issue, but it’s definitely not -- I don’t think it’s fairly characterized as this was obviously a determination that currently a permit is needed. But I take Professor Snape’s point as well that, sure, it’s very close to Priest Lake. But, again, that’s a little undercut by the EPA’s position yesterday that they’re not really relying upon the fact that the lot is really close to Priest Lake. They’re relying upon the fact that it’s supposedly adjacent to the ditch on the other side of the road on the other side of the property.
William Snape: They’re not relying on that fact alone. They’re relying on a bevy of factors, and I guess what I — maybe I’m putting a “Kick Me” sign on me — but recognizing that it’s not a perfect solution, like what is wrong with calling the Army Corp, free of cost, and asking them -- why didn’t they do that? They didn’t. And that was available. That -- I don’t -- I see why that’s not a perfect solution, but it was a solution they didn’t -- it just sort of adds on to the fact that they were going to do what they were going to do, and they didn’t care that it was, maybe, not lawful. They were going to do what they were going to do, and that is sort of why they got slammed.
Tony Francois: Yeah, that impugns a lot of facts that are not in the record. It is an APA case. But I still think that’s circular. I still think it begs the question: what in most people’s ordinary experience building a house on a vacant lot would induce them to think, “Maybe I better check with the Army about whether it’s okay to build here.” I think that’s not -- I think that that’s a more obvious question to people with a lot of experience in this policy space, but I think, once we step out of our professional cohort, that’s a very counterintuitive proposition to most people.
William Snape: Well, we’re getting into anecdotes, but I just have to point out that, during COVID, my wife and I moved to a nine-acre farm. We have a wetland, and it’s pretty obvious where the wetland is, and you’d be stupid to want to build a structure on it. And I guess I just don’t really fully buy that here. It seems like there was water still there even when they put the gravel on it. So I’m just -- there’s -- I don’t know. I don’t buy the fact that this is some sort of innocent landowner who really had the government come down on them unfairly. It seems like they were half asking for this dynamic to take place.
Damien Schiff: Well, if I could just add one more point to Tony’s point -- and setting aside whatever one thinks of the Sackett’s particular facts with respect to this JD process -- if it were as simple as just giving a call to the Army Corp and then you get a letter the next day, that would be one thing. But the JD process is a pretty significant administrative action in its own right. And to get an approved JD from the Army Corp under the current legal regime is something that costs usually quite a lot of money because it requires a lot of consult and analysis to do a significant nexus analysis and to do the wetlands delineation and all of that, which you have to have done before the Army Corp will then process it. And then, of course, there may be back and forth, and then there could be an administrative appeal to JD and all that, so it was a lot easier in the ‘90s when the -- than when the particular JD had issued with this -- for the Sacketts’ property was issued because the standard of the jurisdiction was so broad that really one could, I think, without much effort probably make an affirmative jurisdictional determination. But that hasn’t really been the case since Rapanos, and, so, there hasn’t been, since 2006, I think, a really easy way, and certainly not a quick way, to find out whether one’s regulated.
Matthew Z. Leopold: Well, that -- so we’re at the top of the hour, and I want to be respectful for our viewers. This has been a great, robust debate and really appreciate both -- or all the panelists engaging. Let me throw out a couple questions in conclusion that -- just to offer your thoughts. Any speculation on who might write the decision and if you hazard a guess on how it might turn out?
William Snape: Well, I’ll give Damien the last word, so I’ll go first. I think it will be 5-4 or 6-3 for EPA, and I think that maybe Kavanaugh writes the decision.
Damien Schiff: I don’t disagree with the -- with Professor Snape’s numbers, although I certainly would hope that they go the other way, but I cannot see -- unless, for example, one -- let me simply say, I cannot how EPA can win to the extent that EPA is basing its case, at this point, on application of Justice Kennedy’s significant nexus test. I think the only -- I think the EPA win would be an adoption of a test that is broader than Justice Scalia’s standard but narrower than what Justice Kennedy articulated. But I think that there would be a super majority in favor of rejecting the significant nexus test as it was applied by the Ninth Circuit, certainly. And as to who would write it, Justice Kavanaugh is certainly a plausible one, but I also think maybe the Chief Justice himself might be willing to do it. And one last point, I wouldn’t be surprised if Justice Thomas writes a concurrence, indicating that he’s skeptical as to whether even Priest Lake is subject to federal regulatory authority. He was the only justice who really asked a question about that second part of the case as to how does the channels of Congress power the Commerce Clause, more generally, limit, if at all, Congress’s power to regulate wetlands or other waters.
Matthew Z. Leopold: Thank. Tony, any closing thoughts?
Tony Francois: Well, I’m just really praying that it’s not multiple opinions, each with a section on how to apply Marks to the overall decision.
William Snape: Yeah, there was a question that someone asked about Marks. I have no idea what -- I’d have to ask someone else about what happened in that case. I agree with Tony.
Matthew Z. Leopold: Very good. We’ll end it there. Thank you so much, panelists. Jack, back to you.
Jack Capizzi: Thanks, Matt. Yes, well, it was an excellent discussion, and on behalf of The Federalist Society, I want to thank all of our panelists for participating with us today and for the audience for joining in. We always welcome listener feedback by email at firstname.lastname@example.org. And as always, keep an eye on our website for announcements about upcoming webinars. We actually have another Courthouse Steps webinar today at 3:00 p.m. Eastern. That will be covering Merrill v. Milligan and will feature David Warrington and Michael Dimino. Thank you all for joining us today. And with that, we are adjourned.
Dean Reuter: Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.