Jurisdictional quagmire could undo Sixth Circuit’s nationwide stay of “Waters of the United States”

On October 9, the Sixth Circuit Court of Appeals issued a nationwide stay against the Obama Administration’s controversial Waters of the United States (WOTUS) rule issued jointly by EPA and the Corps. However, the ongoing uncertainty over jurisdiction to review the rule could mean that this stay is short-lived, particularly as this point will be argued in the Sixth Circuit on December 8, 2015.

I.     Analyzing the Sixth Circuit ruling  

The EPA’s new Clean Water Act (CWA) rule defining the geographic reach of waters of the United States has spawned a litigation avalanche. Seventy one plaintiffs, including 31 states, have challenged the rule in seven district courts around the country.  Given the uncertainty over whether review of the rule must occur in federal courts of appeals or district courts, states also sought review of the rule in eight federal courts of appeals. A federal panel consolidated all the appellate cases in the Sixth Circuit Court of Appeals and a number of states intervened in support of the rule.

In a surprise move, a three judge panel of that court, in a 2-1 decision, chose not to resolve the jurisdictional issue first and instead issued a nationwide stay of the rule. The court looked at the different interests at stake, the standards for issuing a stay and the uncertainty over the issues of jurisdiction and concluded that a stay was merited.

In granting the stay, the court noted the “pervasive nationwide impact of the new Rule on state and federal regulation of the nation’s waters” and concluded that, on balance, maintaining the pre-rule status quo was the better approach.

However, the court made preliminary findings that strongly suggested it had serious concerns with the rule. Specifically, the court held, “Even assuming… that Justice Kennedy’s opinion in Rapanos represents the best instruction on the permissible parameters of waters of the United States as used in the Clean Water Act, it is far from clear that the new Rule’s distance limitations [i.e., extending jurisdiction only to waters 4000 linear feet from a tributary] are harmonious with the instruction.”

In his concurring opinion in Rapanos, Justice Kennedy held that in order to establish Clean Water Act jurisdiction, the agencies must determine whether the wetlands in question have a significant nexus affecting the chemical, physical and biological integrity of navigable waters.  However, he also held that “when… wetlands effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the term navigable waters.”

The Sixth Circuit also found that “the rulemaking process by which the distance limitations were adopted is facially suspect” noting that the agencies  had “ failed to identify anything in the record that would  substantiate a finding that the public had reasonably specific notice that the distance-based limitations adopted in the rule were among the range of alternatives being considered.”

Further, the court noted that the “jurisdictional question” will be “ripe for decision in a matter of weeks.” This raises the possibility that the stay may be lifted if the court determines that jurisdiction is only in U.S. district courts. Interestingly, the dissenting judge criticized the other two judges for not resolving the jurisdictional question first. The jurisdictional question will be argued in the Sixth Circuit on December 8, 2015.

II.    The legal landscape quagmire

Should the Sixth Circuit find that it lacks jurisdiction, the stay would be lifted and review of the rule would then fall on the seven federal district courts with pending challenges brought by the seventy one plaintiffs.  Also, due to the October 14 ruling by another multidistrict litigation panel not to consolidate review of the cases in the U.S. District Court for the District of Columbia, there is a distinct possibility of multiple and conflicting rulings by seven federal district courts.  That could lead to conflicting rulings by various federal courts of appeals leading to possible Supreme Court review.

A further complication is that the Eleventh Circuit is considering an appeal by several southern states of a ruling by the district court in Atlanta that review of the rule is only in the court of appeals. Those states are urging that court to quickly reverse the district court’s ruling so that they can seek a nationwide stay of the rule in the Atlanta federal district court should the Sixth Circuit lift its nationwide stay order.

Should courts rule that jurisdiction is only in federal district courts, it is possible that some courts might be influenced by the August 27 ruling of North Dakota federal judge Ralph Erikson who issued a preliminary injunction halting the rule the day before it was to take effect. Judge Erikson found that the rule was unlawfully issued and held that:

  1. “The rule allows for regulation of waters that did not bear any effect on the chemical, physical and biological integrity of any navigable in fact water.”

  2. “The breadth of the tributary definition allows for regulation of any area that has a trace amount of water.”

  3. “No evidence actually points to how these intermittent and remote wetlands have any nexus to a navigable-in-fact water.”

  4. “The court is unable to determine the scientific basis for the 4000 foot standard.’

Judge Erikson also cited two Corps memoranda highly critical of EPA for issuing the rule without resolving the Corps’ major concerns over the data used, the basis for the geographic limits, and EPA’s economic analysis

Significantly, Judge Erikson declined to extend the scope of his injunction nationwide which means that it only remains in effect in the 13 states that sued in North Dakota federal court (North Dakota, Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, South Dakota, Wyoming and New Mexico).

EPA responded that it would seek to enforce the new rule in the remaining 37 states and the District of Columbia.  Rulings by other district courts could potentially enjoin the rule in some states while keeping it in effect in other states.

III.    Implications

If the Sixth Circuit’s stay remains in place, CWA jurisdictional determinations issued after after October 9 would be made under the 2007 and 2008 Corps/EPA guidance, not under the new rule. However, jurisdictional determinations issued between August 28 (the effective date of the rule) and October 9 would remain valid for the 5-year period from issuance unless the requester’s site is located within one of the 13 states covered by Judge Erickson’s August 28 injunction. Jurisdictional determinations for those states would have to be made under the prior guidance.

Should the Sixth Circuit  lift the stay, future jurisdictional determinations would be made under the new rule except for the 13 states covered by Judge Erikson’s injunction ruling.  However, it is possible that other district courts may issue similar preliminary injunctions precluding use of new rule for jurisdictional determinations at sites located in other states.  This quagmire could lead to a confusing situation in which, for example, a jurisdictional determination issued by a Corps district regulating activities in states with differing injunction rulings might have to rely, in part, on the new rule and, in part, on the prior guidance for contiguous sites.

Such a situation would only exacerbate the confusion of the regulated community and could impact a broad range of public and private activities.

Dawson and Associates will be tracking litigation developments and will provide updates as events progress.

Lawrence R. Liebesman, Esq. Senior Advisor

A nationally recognized environmental lawyer with more than 35 years of experience, including 11 years at the U.S. Justice Department, Larry specializes in federal Clean Water and Endangered Species Acts and the National Environmental Policy Act  (NEPA).

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