The Trump Administration’s efforts to overturn the Obama Administration’s 2015 Waters of the United States (WOTUS) rule continue to face an uncertain landscape as the sides line up for a lengthy legal battle. While the battle continues over the “shape of water” subject to federal control, the Environmental Protection Agency (EPA) recently started a process to address a risk faced by many permit applicants – that EPA could veto a Corps of Engineers 404 permit either before it is applied for or after it is issued.
EPA’s veto relief proposal
This summer, EPA took an important step to minimize future risk of its “nuclear option”— its authority to veto permits issued by the Army Corps of Engineers. A June 26 memo from then-Administrator Scott Pruitt directed the agency to prepare new regulations within 6 months to bar use of a Section 404 veto either before a permit application is submitted, as was the case with the EPA’s Pebble Mine action, or after a Section 404 permit is issued, as happened in the Spruce Mine case.
The new rules will also require EPA to consider Corps of Engineers’ NEPA documents (either Environmental Impact Statements or Environmental Assessments) in any veto. This new policy is intended to help applicants facing a “Sword of Damocles” risk that EPA could undo major investments made in navigating the complicated 404 permit process
The WOTUS “quagmire”
As we’ve blogged (see here and here), the Trump Administration’s effort to repeal and replace the Obama Administration’s 2015 WOTUS rule has created a litigation nightmare. Detractors of that rule, including many in Congress and dozens of state Attorneys-General, have criticized it as a Federal land grab subjecting huge areas, including isolated and ephemeral streams, to the Section 404 process based on Justice Kennedy’s “significant nexus” opinion in the 2006 Rapanos decision.
President Trump’s February 2017 Executive Order 13778 directed the Army Corps of Engineers and the EPA to propose a rule “rescinding or replacing” the 2015 rule. In doing so, EPA and the Corps were to consider interpreting the term “navigable waters” in the Clean Water Act consistent with Justice Scalia’s Rapanos decision limiting the term to only flowing streams and rivers and their adjacent wetlands.
Since the Executive Order, these efforts to have faced a legal maze leaving many heads spinning in an effort to understand what “waters” will need Section 404 permits. This January, the Supreme Court ruled that review of the rule should be left to federal district courts and not federal appeals courts, effectively dissolving a 2016 nationwide stay of the rule (for our analysis of SCOTUS’ action, click here). That ruling reactivated pending lawsuits over the 2015 rule with the prospect that the rule would only be enjoined in 13 states suing in the North Dakota district court.
In an effort to lessen confusion, the agencies issued a rule delaying the enforcement of the 2015 rule until 2020. Predictably, several States and environmental groups immediately filed suit in New York federal court challenging this move, which they say weakens waterway protections.
On June 8, the Georgia federal court enjoined the 2015 rule effective in the 11 States suing there but leaving the 2015 rule potentially in place in 26 states. They also sent a proposed WOTUS replacement rule to OMB on June 15 with a projected publication date of August. To further confuse the situation, on June 29, the agencies sought an additional 30 days of public comments on their proposed June 2017 repeal rule.
Also on June 8, the House passed an Energy and Waters appropriations bill that would immediately repeal the 2015 rule which would remove the repeal issue from litigation should the bill become law.
What Should Permit Applicants do?
While the legal battles rage, applicants should heed the EPA’s advice on the waters subject to regulation. The EPA and Corps of Engineers have made clear that the 2008 guidance issued following the Rapanos decision remains in effect for setting out technical information to support a Clean Water Act jurisdictional determination request.
Applicants should also follow the legal developments including case law such as the Seventh Circuit’s June decision in Orchard Hill Building Co. v. Corps holding that the Corps of Engineers had not provided sufficient technical support under the 2008 guidance for asserting jurisdiction over wetlands near Chicago.
Finally, applicants should closely follow the WOTUS replacement rule process and the upcoming EPA veto rule revisions to understand how these processes might impact the risks they face in planning major projects.
Larry Liebesman 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).