Supreme Court imposes narrower definition of Clean Water Act jurisdiction

The US Supreme Court ruled May 25 that regulatory agencies must stop trying to extend the reach of their authority under the Clean Water Act beyond federal waters and adjoining wetlands. A wetland must have a continuous surface water connection to federal waters to fit within the scope of the law, the court ruled.

For oil and gas companies, the decision in Sackett v. Environmental Protection Agency (EPA) has the potential to reduce some of the uncertainties and difficulties of permitting for pipelines and drilling sites. The plaintiffs’ position in the case was supported by the American Petroleum Institute, the Liquid Energy Pipeline Association, and the American Gas Association.

The ruling was a setback for the EPA and the US Army Corps of Engineers, the two federal administrators of the Clean Water Act. EPA Administrator Michael Regan issued a statement expressing disappointment and saying the agency will “carefully review the Supreme Court decision and consider next steps.”

EPA and the Corps of Engineers early this year published a final rule strongly reasserting their claim to permitting authority over activity that disturbs isolated wetlands and ponds (OGJ Online, Jan. 3, 2023). The court decision may mean extensive revision of that rule.

“The court’s ruling returns the scope of the Clean Water Act to its original and proper limits,” said Damien Schiff, a senior attorney at Pacific Legal Foundation who argued the case on behalf of property owners Michael and Chantell Sackett. “Courts now have a clear measuring stick for fairness and consistency by federal regulators.”

Split decision

The primary ruling in the case was written by Justice Samuel Alito and was supported on a 5-4 split. Four justices argued against the narrower delineation of Clean Water Act jurisdiction. The four insisted that some longstanding language used by the regulators to define “adjacent” wetlands was sufficiently clear.

That language said adjacent wetlands should include wetlands “separated from other waters by man-made dikes or barriers, natural river berms, beach dunes and the like.” But that phrasing had failed to resolve the Sacketts’ dispute with EPA, and the language did not come from the law itself.

“EPA must provide clear evidence that it is authorized to regulate in the manner it proposes,” Alito wrote for the majority. The Clean Water Act does not provide clear congressional authorization for the agency’s interpretation, he said.

The Clean Water Act refers to the “waters of the United States” without defining those waters, and it makes a supplemental reference to “navigable waters.” To be jurisdictional, wetlands must be “indistinguishable” from jurisdictional waters so that there is no clear demarcation between the wetlands and waters, Alito wrote.

Alito leaned heavily on the 2006 Supreme Court decision in Rapanos v. US, in which the court failed to produce a majority opinion because of its divergent views. Four of the justices in that case favored an opinion written by Antonin Scalia with support from Alito, Chief Justice John Roberts, and Justice Clarence Thomas. Alito prominently cited that “plurality” opinion by Scalia in Sackett v. EPA.

No “significant nexus”

The Rapanos decision led to EPA and the Corps of Engineers spending 17 years trying to determine the act’s jurisdiction through ecosystem analyses. Those analyses examine whether a “significant nexus” exists between an isolated wetland and a jurisdictional water body, an idea that was put forward by Justice Anthony Kennedy in his concurring opinion in the Rapanos decision.

Justice Brett Kavanaugh, who filed a concurring opinion in the latest case, argued EPA was wrong to insist on the Sacketts needing a federal permit to build on their property near Priest Lake in Idaho, and Kavanaugh said the US Court of Appeals for the Ninth Circuit was wrong to accept EPA’s “significant nexus” test as determining that the Sacketts needed a permit.

Kavanaugh’s concurring opinion drew support from Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson, which meant all nine justices favored throwing out the significant nexus test.

But Kavanaugh did not accept Alito’s insistence that a continuous surface water connection is needed to clearly make a wetland jurisdictional.

Thomas, who also filed a concurring opinion, argued for a stronger emphasis on the “navigable waters” phrase in the Clean Water Act. He said federal regulators need to keep in mind the historic context of “waters of the United States” as channels of interstate commerce.

“Here, no elaborate analysis is required to know that the Sacketts’ land is not a water, much less a water of the United States,” Thomas said.

“The nonnavigable so-called ‘tributary’ (really, a roadside ditch) across the street from the Sacketts’ property is not a water of the United States because it is not, has never been, and cannot reasonably be made a highway of interstate or foreign commerce,” he wrote.