Primer on President’s Clean Water Act Power Grab

On May 2, the Environmental Protection Agency (“EPA”) and the United States Army Corps of Engineers (“USACE”) proposed new Guidance to clarify which waters of the United States are subject to regulation under the Clean Water Act (“CWA”). If implemented as is, this Guidance document would increase significantly the authority of the federal government and it also would have a major economic impact. That is, it’s a major new policy. Yet it was never approved by the Congress. So it is another Obama power grab. (My colleague Marlo Lewis has covered extensively the EPA’s global warming power grab. Another colleague, Chris Horner, wrote a book on the subject.)

Unlike President Obama’s other power grabs, which are largely unprecedented, the history of federal jurisdiction under the CWA is characterized by the EPA and USACE seizing as much authority as they can. Therefore, the President’s Guidance document is taking a tradition of federal expansion to its extreme bounds. What follows is a primer that explains the context of President Obama’s Clean Water Act Guidance.

The CWA regulates the discharge of pollution into “navigable waters.” For a century before the enactment of the CWA in 1972, the Supreme Court interpreted the phrase “navigable waters” to mean waters that are interstate and “navigable in fact.” In the CWA, however, the Congress broadened the definition of “navigable waters” so as to include non-navigable waters, in order to afford a greater degree of environmental oversight. The primary non-navigable waters, as established by US Army Corps of Engineers regulations, are waters that could “affect interstate commerce” (including “sandflats,” “sloughs,” “natural ponds,” and “prairie potholes”), “tributaries” of interstate navigable waters or waters that could affect interstate commerce, and “wetlands” that are “adjacent” to interstate navigable waters or waters that could affect interstate commerce.

Three Supreme Court cases have interpreted the scope of federal regulation under the Clean Water Act:

1. United States v. Riverside Bayview Homes (1985):

The Supreme Court affirmed that non-navigable waters are subject to federal jurisdiction, but only if the regulatory agency could discern a “significant nexus” to interstate navigable waters or waters that could affect interstate commerce. Of course, “significant nexus” is an imprecise term, and the EPA/USACE took advantage of the ambiguity to justify ever-greater seizures of authority under the Clean Water Act.

2. SWANCC v. U.S. Army Corps of Engineers (2001):

In the 16 years after U.S. v. Riverside Bayview Homes, federal jurisdiction under the CWA expanded continuously, often to the point of absurdity. For example, in 1986, the USACE implemented a “Migratory Bird Rule,” by which it asserted jurisdiction over all waters that could serve as a habitat for migratory birds. Of course, this essentially incorporates every body of water in the United States. In SWANCC v. US Army Corps of Engineers, the Supreme Court invalidated the rule. The decision clearly was a check of the EPA/USACE’s actions in the wake of United States v. Riverside; however, the breadth of the Supreme Court’s ruling was in doubt, which allowed the EPA/USACE to interpret SWANCC v. U.S. Army Corps of Engineers as pertaining solely to the “Migratory Bird Rule.” Before the case, the EPA/USACE primarily justified CWA jurisdiction based on the “Migratory Bird Rule”; after the case, the EPA/USACE used evermore tenuous interpretations of “tributaries,” “adjacent wetlands,” and waters that could “affect interstate commerce” to seize evermore CWA authority.

3. Rapanos v. United States (2006):

Four dissenting Justices basically ruled that federal jurisdiction is unlimited.

Four Justices (Scalia, Roberts, Thomas, and Alito) aggressively sought to limit federal jurisdiction under the Clean Water Act. They asserted that “tributaries” (of interstate navigable waters or waters that could affect interstate commerce) were limited to “relatively permanent, standing, or continuously flowing bodies of water forming geographic features.” They also limited the definition of adjacency (as it pertains to “adjacent wetlands”) such that the wetland must share a continuous surface water connection with interstate navigable waters or waters that could affect interstate commerce in order to be subject to federal authority under the Clean Water Act. The major impact of this interpretation was that it excluded intermittent and ephemeral streams from the federal government’s purview. Were this interpretation to become binding, it would be very consequential victory for economic liberty. For example, it would get the Obama administration off the back of the Appalachian coal industry, which is being destroyed in part due to the EPA’s regulation of ephemeral streams.

Justice Kennedy agreed with plurality to remand the case back to 6th Circuit Court. However, he completely disagreed with their reasoning. In a concurring opinion, he said that intermittent waterways, even man-made ditches, could be “tributaries” subject to federal regulation under the Clean Water Act, if they had a “significant nexus” to interstate navigable waters or waters that could affect interstate commerce. (This was the same “significant nexus” test established in U.S. v. Riverside Bayview Homes.) Justice Kennedy wrote that this “significant nexus” test also could be used to establish adjacency for “adjacent wetlands” subject to federal regulation. Kennedy agreed with the plurality to remand the case only because the US Army Corps of Engineers and the 6th Circuit Court based their decisions (to regulate or to allow regulation of non-navigable waters, respectively) on justifications other than the “significant nexus” test. He strongly indicated that the tributaries and wetlands that were the subject of the Rapanos case would pass the “significant nexus” test.

In 2007, the EPA/USACE issued Guidance for interpreting federal jurisdiction under the Clean Water Act in the wake of Rapanos v United States. Just as they did in the wake of SWANCC v. U.S. Army Coprs of Engineers, USACE/EPA interpreted the Rapanos decision in the broadest possible fashion. The agencies adopted both the plurality’s criteria AND Kennedy “significant nexus” test. That is, the USACE/EPA could use either the plurality’s standard or Justice Kennedy’s standard, even though they were wildly different. As I noted above, the imprecision of the “significant nexus” test means that it basically includes everything under the sun. As such, the EPA/USACE was free to ignore the plurality opinion. So little changed.

Meanwhile, the courts were making hash of Rapanos v. United States. This makes sense. Rapanos resulted in three different interpretations, and none carried a majority. There was no agreement in the highest court in the land, so there was no reason to expect agreement in America’s myriad lower courts.