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Looking to 2024: SCOTUS’ Chevron ruling and its possible impact on project permitting

Updated: Jan 18

Note: 2024 will see many developments in in federal permitting. Some will likely come from court decisions while others may come from federal regulatory decisions. During the next few weeks, Dawson & Associates’ experts in federal environmental permitting will share perspectives on how this process may change in 2024 and what this could mean for permit applicants.

On January 17, 2024, the Supreme Court will hear two cases reexamining the Court’s 1984 Chevron “deference” ruling. Under that decision courts have largely deferred to federal agency rules if the agencies’ interpretation was reasonable and not inconsistent with the authority granted by Congress.  

Legal scholars argue that Chevron has led to the growth of the “administrative state” and has generated criticism that such deference violates Constitutional separation of powers principles. The cases of Loper Bright Enterprises v. Raimondo and Relentless v. Commerce to be heard on January 17 involve National Oceanic & Atmospheric Administration fisheries rules holding vessel operators responsible for paying salaries of on-board monitors to guard against overfishing. A decision is expected by June 2024.

The Court’s ruling could have a major impact on the September 8, 2023 EPA/Corps rule defining Waters of the United States (“WOTUS”) and EPA’s September 27, 2023 State Water Quality Certification (“WQC”) rule under the Clean Water Act. Those rules will impact permitting for many activities including energy, mining, infrastructure and housing.

The EPA/Corps WOTUS rule (88 F.R. 61964) implemented the Supreme Court’s May 25, 2023 Sackett v. EPA decision that limited the geographic extent of CWA jurisdiction only to those wetlands that are abutting traditionally navigable streams, rivers and lakes. The Court struck down the “significant nexus” test that allowed EPA to assert jurisdiction over wetlands that do not abut traditional flowing waters based on the ecological value of those wetlands.

The September 8 EPA/Corps rule relies on a “hydrologic connection” test but does not define that term or whether the abutting water was a “relatively permanent” flowing water. Under that rule, a land owner must consult technical studies and data to understand how those undefined terms would apply to a project.

Failure to define those terms will likely cause confusion as to the scope of federal regulation and cause delay and expense in permitting for many projects. The rule was recently challenged in North Dakota and Texas Federal Courts by a coalition of 26 states and industry groups. Should the Supreme Court overturn or modify Chevron, the North Dakota and Texas cases could find that EPA and the Corps could no longer rely on deference principles to uphold reliance on undefined technical data and studies to comply with the CWA.

The Biden Administration’s September 27, 2023 CWA WQC rule (88 F.R. 66559) addressed the CWA section 401 requirement that an affected state or tribe find that a proposed discharge into a WOTUS meets the state or tribe’s water quality standards. Any conditions issued by the state or tribe would become conditions of a federal permit and a state or tribe must act within one year of the request or the WQC is deemed waived.

The Trump Administration’s  2020 WQC  rule reversed EPA’s longstanding policy that the state review encompasses the entire project’s impact on water quality and not just the impact of the discharge itself. The  Biden Administration’s September 27 2023 rule reversed the Trump rule and reinstated the long-standing scope of review. For example, under the Biden rule, a state or tribe  could review the overall land use impacts of energy, mining or transportation projects on nearby streams and rivers and not just the actual impacts of discharges directly into those waters as under the Trump rule. Recently, 16 states and industry groups sued in Louisiana federal court challenging the rule asserting that the Biden Administration’s interpretation of CWA Section 401 exceeded its authority under the CWA.

Should the Court overturn or modify Chevron, the court reviewing the recent 401 rule might not give deference to the Biden administration’s view that EPA’s longstanding interpretation is correct.  The result could impact federal and state permitting for many projects that have broad water quality impacts.

Larry Liebesman, Esq.

Senior Advisor

A nationally recognized environmental lawyer with more than 40 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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