Obama-Era WOTUS Rule Back In Effect, What Happens Now?

Environmental Alert

(by Lisa M. Bruderly, Janet L. McQuaid, Gary E. Steinbauer)

Late last week, a South Carolina district court reinstated the Obama administration’s 2015 Clean Water Rule (referring to it as “the 2015 WOTUS rule”) in 26 states, including Pennsylvania, Ohio, New York, Maryland, New Jersey and the New England states.  The decision overturns a move by the Trump administration earlier this year to delay the applicability date of the 2015 WOTUS rule until early 2020 and brings the Rule’s definition of “waters of the United States” (WOTUS) into effect in these states, at least for the time being.  Unless the South Carolina decision is overturned or invalidated, the reinstatement of the 2015 definition of WOTUS could have significant Clean Water Act (CWA) permitting, compliance and enforcement implications for regulated entities in these 26 states, given that the 2015 definition of WOTUS is widely regarded by industry as unreasonably expanding the types of waterbodies under U.S. EPA and U. S Army Corps of Engineers’ jurisdiction.

Background Regarding the Clean Water Rule

Shortly after the August 28, 2015 effective date of the 2015 WOTUS rule, the Rule was challenged in federal courts, including the Sixth Circuit. While the Sixth Circuit preliminarily enjoined the Rule in October 2015 (See Ohio v. United States Army Corps of Eng’rs, 803 F.3d 804 (Oct. 9, 2015)), on January 22, 2018, the Supreme Court invalidated the Sixth Circuit’s preliminary injunction, holding that the district courts, rather than the courts of appeal, had original jurisdiction over the appeals (S.Ct. 16-299). Nat’l Ass’n of Mfrs. v. DOD, 138 S. Ct. 617 (2018).

In anticipation of the Sixth Circuit vacating its preliminary injunction (and the 2015 WOTUS rule coming into effect in all but then 13 states), on January 31, 2018, EPA and the Corps finalized a rule setting an applicability date for the 2015 WOTUS rule of February 6, 2020.  This rule, termed by the district court as the “Suspension Rule,” was intended to give the agencies time to reconsider the 2015 WOTUS rule, as they had been directed to do by Executive Order 13778 issued by President Donald Trump in February 2017.  In proposing the Suspension Rule, EPA and the Corps solicited comments on adding an applicability date but excluded from the solicitation comments on the definition of WOTUS.

South Carolina District Court Decision

On August 16, 2018, the South Carolina district court overturned the Suspension Rule on motions for summary judgment by the environmental plaintiffs. (See South Carolina Coastal Conservation League et al. v. Pruitt (D.S.C. Case No. 2:18-cv-330)).

In granting summary judgment to the environmental plaintiffs, Judge David Norton (who had been appointed by President George H.W. Bush), held that EPA and Corps had failed to comply with the Administrative Procedures Act (APA) in issuing the Suspension Rule.  Judge Norton expressly declined to reach the merits of the 2015 WOTUS rule, but did point to Fourth Circuit precedent, which holds that when an agency suspends later regulations and reinstates previous ones, while “preventing any discussion of the ‘substance or merits’ of either set of regulations” the opportunity for comment “cannot be said to have been ‘a meaningful opportunity’ for comment” within the meaning of the APA.  Slip op. at *10 (quoting N. Carolina Growers’ Ass’n, Inc. v. United Farm Workers, 702 F.3d 755, 770 (4th Cir. 2012)).

The district court held that because the definitions of WOTUS under the 2015 rule and the 1980’s regulations of WOTUS were “drastically different,” the agencies were required to solicit and consider comments on the merits of the regulatory definitions. By failing to do so, the district court held that the agencies violated the APA.

The court further held that a nationwide injunction of the Suspension Rule was necessary to provide complete relief, in part because the environmental plaintiffs made a “facial APA challenge,” and in part because the Suspension Rule affects a “vast array of wetlands across the United States,” including those outside South Carolina and the Fourth Circuit.  Slip op. at *16-17.  In granting the nationwide injunction, the district court quoted U.S. Attorney General Jeff Sessions’ approval of another nationwide injunction and observed, “What is good for the goose is good for the gander.” Slip op. *18, n.4.

The day after the district court enjoined the Suspension Rule, industry and agricultural defendants appealed the court’s decision to the Fourth Circuit.  Appellants are seeking a stay of the injunction pending the Fourth Circuit’s decision on the appeal or, in the alternative, until the Fourth Circuit rules on a motion for stay to be filed in that court.  A stay, if granted, would temporarily reinstate the Suspension Rule and take the 2015 WOTUS rule back out of effect.

Implications of the South Carolina Decision

For the time being, the South Carolina’s nationwide order enjoining the Suspension Rule means that the 2015 WOTUS rule is in effect in 26 states. These states are:

California           Massachusetts         Oregon

Connecticut        Michigan*               Pennsylvania

Delaware             Minnesota               Rhode Island

Hawaii                 Mississippi*            Tennessee*

Illinois                 New Hampshire     Texas*

Iowa                    New Jersey              Vermont

Louisiana*          New York               Virginia

Maine                  Ohio*                      Washington

Maryland            Oklahoma

The six states indicated with an asterisk have motions for preliminary injunctions of the 2015 WOTUS rule pending in the district courts, as discussed in more detail later in this Alert.  In all 26 states, however, the South Carolina decision could currently have significant CWA permitting and compliance effects on developers, industry and other entities because the 2015 WOTUS rule, arguably, expands the scope of regulated waters under the jurisdiction of U.S. EPA and the Corps.

For example, if additional WOTUS are identified in areas of impact by development, more complicated, lengthy and expensive Section 404 permitting and mitigation may be required.  In some instances, the development may not be permitted at all.  As a further example, the compliance point for a wastewater or stormwater discharge may change because the regulating agency may determine that the nearest receiving water is closer than previously determined.

In addition to federal compliance and permitting, states with authorized programs will need to examine the decision to determine how it impacts their regulatory and enforcement programs.

Existing Preliminary Injunctions in 24 States

A district court has preliminarily enjoined the 2015 WOTUS rule pending a decision on the merits in 24 states, and the 2015 WOTUS rule will not go into effect in these states.  The 2015 WOTUS rule has been preliminarily enjoined:

  • By the North Dakota District Court (3:15-cv-59), in 13 states since August 27, 2015: North Dakota, Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, South Dakota, Wyoming, and New Mexico.
  • By the Southern District of Georgia (2:15-cv-79), in 11 states since June 8, 2018: Georgia, Alabama, Florida, Indiana, Kansas, North Carolina, South Carolina, Utah, West Virginia, Wisconsin, and Kentucky. The National Wildlife Federation (NWF) appealed the preliminary injunction to the Eleventh Circuit (Case No. 18-13054).

In these 24 states, the Corps’ and EPA’s 1986 and 1988 regulations and related guidance will continue to define the scope of federal jurisdiction until the district court’s decision on the merits, the agencies finalize a replacement rule, or, if NWF’s appeal to the Eleventh Circuit were to be successful, the court vacates the preliminary injunction.

Status of 2015 WOTUS Rule Litigation

As to the other 26 states, there were reportedly a total of 16 challenges of the 2015 WOTUS rule filed in 13 district courts by more than 80 parties representing the many sides of the WOTUS issues.  Some of these challenges were dismissed on jurisdictional grounds, and others have been stayed pending decisions on the jurisdictional issues and the challenges to the Suspension Rule.  However, several of the challenges to the 2015 WOTUS rule are now moving forward.

Of particular relevance to this Alert, six states (indicated with an asterisk (*) in the table above), along with business and industry groups, have filed motions in the Southern District of Texas (Case Nos. 3:15-cv-162 and -165) and the Southern District of Ohio (2:15-cv-2467) for preliminary injunctions of the 2015 WOTUS rule, potentially with nationwide reach.  Ten states, the District of Columbia and several environmental interest groups have intervened or filed amicus briefs opposing the motions for preliminary injunctions.  The Texas and Ohio district courts may rule on the motions for preliminary injunction in relatively short order.  The unsuccessful parties in Texas would have the right to appeal to the Fifth Circuit.  The unsuccessful parties in Ohio would have the right to appeal to the Sixth Circuit, which is the same court that previously issued a nationwide preliminary injunction in October 2015.

If you would like to discuss how the South Carolina decision may impact your facility’s environmental compliance or the status of pending WOTUS litigation, please contact Lisa M. Bruderly at lbruderly@babstcalland.com or 412.394.6495, Janet L. McQuaid at jmcquaid@babstcalland.com or 412-394-6498, or Gary E. Steinbauer at gsteinbauer@babstcalland.com or 412-394-6590.

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