The Environmental Protection Agency and the Army Corps of Engineers have presented a draft of joint regulations under the Clean Water Act to the Office of Management and Budget for an internal governmental review.  While the draft rules have not yet been formally proposed for public review and comment, a leaked copy of the new regulations is raising concerns that the EPA and the Corps are seeking a dramatic expansion of federal permitting jurisdiction under the CWA.  

Does a “Navigable Water” Have to Be “Navigable?”

Under Section 404 of the CWA, a federal permit from the Corps is required for discharging dredged or fill material into “navigable waters,” which are defined in the statute merely as “waters of the United States.”  A discharge of pollutants to “waters of the United States” similarly requires a National Pollutant Discharge Elimination System (NPDES) permit under Section 402 of the CWA, which in most cases is issued by the applicable state water quality agency, although the permit process and its substance are governed by federal regulations issued by the EPA.

Historically, the EPA and the Corps have interpreted the phrase “waters of the United States” very broadly.  But in 2001, the Supreme Court ruled that the definition did not cover isolated, non-navigable ponds whose only connection to interstate commerce was their use by migratory birds.  Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC).  Then, in 2006, a fractured Supreme Court, through Justice Kennedy’s oft-cited concurring opinion, further limited the CWA’s coverage to those waters that have a “significant nexus” to a navigable waterway.  Rapanos v. United States, 547 U.S. 715 (2006).

Since the Supreme Court issued its decision in Rapanos more than seven years ago, the fundamental threshold issue of what constitutes a “water of the United States” has been notoriously unclear.  The EPA and Corps tried to address this uncertainty through interpretive guidance documents issued in 2008 and 2011.  But the guidance has done little to provide clarity over the boundaries of CWA jurisdiction, and the 2011 guidance unleashed a political firestorm and was never finalized. 

In September 2013, the EPA published a draft scientific report that set the stage for the new draft regulations.  The draft report, entitled Connectivity of Streams and Wetlands to Downstream Waters: A Review and Synthesis of the Scientific Evidence, finds that all streams, regardless of their size or how frequently they flow, are connected to and have important effects on downstream navigable waters.  The draft report also finds that wetlands and open waters in floodplains and riparian areas are integrated with and strongly influence downstream streams and rivers.  The findings of the draft report support a very broad reading of what constitutes a “significant nexus” under the Rapanos decision for purposes of asserting federal permitting jurisdiction under the CWA.  The report is designed, when it is finalized, to provide the scientific basis for the new regulations defining “waters of the United States.”  

How Do the New Draft Rules Define “Waters of the United States?”

The new draft regulations would define “waters of the United States” to include the following seven categories:  (1) navigable waters (such as rivers and lakes); (2) interstate waters; (3) the territorial seas; (4) all tributaries of water bodies in the first three categories; (5) impoundments of water bodies that otherwise meet the definition of “waters of the United States”; (6) waters “adjacent” to water bodies in the first five categories; and (7) “other waters” (such as mudflats, sandflats, wet meadows, ponds and prairie potholes)  that are determined, on a case-specific basis, to have a “significant nexus” to a water body in one of the first three categories.  For a water to have a “significant nexus,” it must—either alone or in combination with other similarly situated waters in the same watershed—have more than a “speculative or insubstantial effect” on the chemical, physical or biological integrity of a water body in one of the first three categories. 

Given the expansive scientific findings in the EPA’s draft connectivity report, the reach of the new draft regulations should not come as a surprise.  But the changes to the existing rules, which have not been revised since 1986, would be quite significant:

• The Rapanos decision raised considerable doubt as to whether tributaries with only intermittent or ephemeral flows are subject to the CWA.  The new rules would resolve this uncertainty by categorically establishing federal jurisdiction over tributaries regardless of their size or flow.  And the new rules would define “tributary” to include virtually any natural or man-made channel or wetland that contributes flow, either directly or indirectly, to a downstream water body.
• In making “adjacent” waters subject to federal authority, the new rules would nullify the decision in San Francisco BayKeeper v. Cargill Salt, 481 F.3d 700 (9th Cir. 2007).  In that case, the Ninth Circuit ruled that the existing regulations cover only adjacent wetlands, whereas adjacent waters that do not qualify as wetlands (such as ponds that lack wetland characteristics) are beyond federal authority.
• The new rules would substantially broaden the definition of “adjacent” to encompass all waters located within a floodplain or riparian area of, or that have a surface or shallow subsurface hydrologic connection to, a jurisdictional water body such as a river or lake.  This revision would essentially eliminate the jurisdictional restriction under the agencies’ 2008 guidance interpreting Rapanos that an “adjacent” water must be in reasonably close physical proximity to the river or lake.
• The new rules would make it clear that all interstate waters - and thus all tributaries of, and all water bodies “adjacent” to, an interstate water - are covered by the CWA regardless of whether the interstate water is navigable or not.
• Even for small isolated waters that have no hydrological connection to a jurisdictional water body and are not located within a floodplain or riparian area, the new regulations would allow for the assertion of permitting authority on a case-by-case basis.  In particular, the Corps and EPA would have the power to regulate these isolated waters if they can point to a “significant nexus” to a jurisdictional water body such as a river or lake.  And this significant nexus can be shown if the isolated water, in combination with other similar waters in the same watershed, has anything more than a “speculative or insubstantial effect” on the chemical, physical or biological integrity of the river or lake. 

More Clarity or More Litigation?

The preamble to the draft regulations states that the revised definition of “waters of the United States” is intended to make the CWA permitting process “less complicated and more efficient” by “increasing transparency, predictability, and consistency,” leading to “increased clarity” and “less litigation.”  But the fate of the new regulations is far from clear, as they will almost certainly be challenged in court if adopted in their current form.

The fundamental problem is the lack of any clear direction from Congress on what the term “waters of the United States” means.  As Justice Alito lamented in his concurring opinion in Sackett v. Environmental Protection Agency, 132 S. Ct. 1367 (2012), “the words themselves are hopelessly indeterminate” and since the CWA was enacted in 1972 “Congress has done nothing to resolve this critical ambiguity.” 

As Justice Alito’s plea for congressional action goes unanswered, the EPA and the Corps now seem poised to reassert and expand their authority in response to SWANCC and Rapanos.  While there is much more process to follow, ultimately the boundaries of CWA jurisdiction will be for the courts to decide.

Read about this and other legal developments in Perkins Coie's California Land Use & Development Law Report.