Federal Agencies Keep Failing To Legally Interpret the Clean Water Act

The Biden administration is the third administration in a row to fail to issue Clean Water Act regulations that pass judicial scrutiny.

Whether the Clean Water Act gives the federal government the power to regulate dry riverbeds, isolated streams, and land next to wetlands remains clear as mud, as a recent federal court decision illustrates.

This past Monday, the U.S. District Court for the Southern District of Texas issued a preliminary injunction against the recently finalized clean water regulations issued by the Environmental Protection Agency (EPA) and Army Corps of Engineers.

Judge Jeffrey Vincent Brown found that plaintiffs—the state governments of Texas and Idaho plus a long list of national trade associations—would likely prevail in their argument that the new rules amount to illegal and/or unconstitutional federal overreach.

The ruling makes the Biden administration the third presidential administration in a row to try and fail to establish a workable definition of which waters and properties are, in fact, governed by the 1972 Clean Water Act.

"We've been in this never-ending game of regulatory pingpong," says Charles Yates, an attorney with the Pacific Legal Foundation (PLF). "The EPA and the Army Corps are batting zero on legally interpreting the" Clean Water Act.

That 1972 law requires that anyone discharging pollutants into "navigable waters"—defined as a territorial sea and the "waters of the United States" (WOTUS)—must first obtain a federal permit. Territorial seas are defined in the statute, but "waters of the United States" are not. It's up to federal regulatory agencies and the courts to figure out what exactly that phrase means.

Environmentalists and successive Democratic administrations have pushed for an expansive WOTUS definition that would include almost every body of water, including small streams, ditches, and even land that's only intermittently wet. The theory is that even discharges into tiny streams will eventually work their way into larger, navigable bodies of water. Therefore, they should be covered by the Clean Water Act's regulations.

A long list of regulated industries, Republican-run state governments, and property rights advocates have all argued that this interpretation of the Clean Water Act would effectively give the federal government regulatory power over every piece of property in the country. That, they say, goes beyond the statute's intent, as well as the Constitution's limits on federal power.

Complicating things is a confusing 2006 U.S. Supreme Court ruling in the case Rapanos v United States in which no clear majority was able to establish a definition for "waters of the United States."

In a plurality opinion in that case, Justice Antonin Scalia suggested a property would have to have a continuous surface connection to navigable waters in order to trigger the Clean Water Act. In a concurring opinion, Justice Anthony Kennedy suggested a broader, more convoluted "significant nexus" test that would cover wetlands if they "either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as 'navigable.'"

Since that case, it's been an open question as to which test should apply. Regulatory agencies have also done their best to stretch the scope of the law.

The Obama administration published its own expansive Waters of the United States rule in 2015 that very quickly attracted a flurry of lawsuits. Judges in North Dakota, Texas, Georgia, and Oregon issued rulings staying the rule's implementation in 27 states.

When the Trump administration tried to delay the implementation of the rule to 2020, the courts stopped that too, so the rule went into effect in 22 other states. (There was an open question over whether an injunction applied to New Mexico.)

In 2020, the Trump administration finalized its own replacement for the Obama administration's rule. That rule was then vacated by a federal court in August 2021. By that time, the Biden administration was already working on reviving and tweaking the preexisting Obama rules.

That happened in January, precipitating the lawsuit from Texas, Idaho, and various trade association representing homebuilders, agricultural interests, and more. Last week's ruling enjoins the new Biden rule in just Texas and Idaho.

The preliminary injunction is "a recognition from the court that what the agencies are doing here is not faithful to the text of the statute," says Yates. "Guidance from the Supreme Court is really necessary before they can put together a rule that will survive judicial review."

That guidance might soon be forthcoming.

Last year, the U.S. Supreme Court heard oral arguments in a potential landmark Clean Water Act case, Sackett v. EPA. The plaintiffs, Michael and Chantell Sackett, (who are represented by PLF) have been trying to build a home on their property in a residentially zoned, built-out subdivision in Idaho for 16 years.

Standing in their way has been the EPA, which says their landlocked property is a navigable water because it's close to a stream that runs into a nearby lake and, therefore, meets Kennedy's "significant nexus" test.

The agency insists that the couple needs a permit to move ahead with construction. Getting that permit could cost as much as $250,000. Preceding without a permit could see the Sacketts hit with daily fines of up to $75,000.

The Sacketts already won one Supreme Court case securing their right to sue the EPA.

Their second case argues that the scope of the Clean Water Act should be narrowed to exclude their landlocked property. They've suggested Scalia's opinion in Rapanos requiring a continuous surface connection should be the standard.

The U.S. Court of Appeals for the 9th Circuit ruled against the Sacketts in an opinion that held that Kennedy's "significant nexus" test should be the controlling standard for whether a property is subject to the Clean Water Act.

During oral arguments last October, conservative justices seemed pretty skeptical of the significant nexus test. Bloomberg Law reports that they didn't seem fully on board with Scalia's surface connection test either.

While the Sacketts' case precedes the Biden administration rule, it could still upend the new regulations.

"If the Supreme Court were to enter a decision creating precedent that the significant nexus test was illegal, then substantial revisions would need to occur to the Biden rule because it would not pass muster," says Yates.

In his opinion from last week, Brown wrote that the new EPA rule "ebbs beyond the already uncertain boundaries" of the significant nexus test. He also criticized the administration's claim of Clean Water Act jurisdiction over all interstate waters, regardless of whether they're navigable.

We're still waiting on an opinion in the Sackett case. Yates says a ruling is essential to give landowners some clarity.

"Absent definitive guidance from the Supreme Court, a lawful and durable definition of navigable waters is going to remain elusive," says Yates. "It's ordinary landowners like the Sacketts, farmers, ranchers, people trying to use their land productively that have been stuck in the middle."