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U.S. Supreme Court Clarifies Procedure For Challenging Regulations Defining the Scope of the Clean Water Act, Leaving Substance Unresolved

Reversing a Sixth Circuit Court of Appeals, the U.S. Supreme Court held that challenges to U.S. Environmental Protection Agency (EPA) regulations defining “Waters of the United States” (WOTUS), and thereby describing the scope of federal jurisdiction under the Clean Water Act (CWA), must be brought first in the U.S. District Court. The Court’s decision, combined with significant regulatory uncertainty stemming from the Trump administration’s stated intention to promulgate a new definition of WOTUS, signals that uncertainty regarding the CWA’s reach will likely persist for years to come. During that time, significant regional differences in implementation of the CWA are likely. [National Association of Manufacturers v. Department of Defense, ___U.S.___, S. Ct. Case No. 16-299 (U.S. Jan. 22, 2018).]

 

Background

The Clean Water Act, 33 U.S.C. § 1251 et seq., prohibits the unpermitted discharge of “any pollutant by any person,” defines “discharge of pollutant” to include “any addition of any pollutant to navigable waters from any point source,” and defines navigable water as “the waters of the United States,” or WOTUS. 33 U.S.C. §§ 1311(a), 1362(12) and (7). Thus, the scope of the National Pollutant Discharge Elimination System (NPDES) programs, administered by the EPA pursuant to 33 U.S.C. § 1342 and by the U.S. Army Corps of Engineers (Corps) pursuant to 33 U.S.C. § 1344, are defined by those agencies’ definition of WOTUS. In 2015 the agencies proposed a “WOTUS Rule” to define the term:

. . .The WOTUS Rule ‘imposes no enforceable duty on any state, local, or tribal governments, or the private sector.’ …. As stated in its preamble, the Rule ‘does not establish any regulatory requirements’ and is instead ‘a definitional rule that clarifies the scope of’ the statutory term WOTUS. 80 Fed. Reg. 37102 and 37054.

The CWA provides two avenues for obtaining judicial review of EPA implementing actions: 1) pursuant to the Administrative Procedure Act, by challenging final agency actions in federal District Court; and 2) in seven statutorily-enumerated circumstances, jurisdiction over challenges lies exclusively in the federal Circuit Courts of Appeals, including, as relevant here, EPA actions “approving or promulgating any effluent limitation or other limitation under section 1311, 1312, 1316, or 1345,” pursuant to § 1369(b)(1)(E), and “issuing or denying any permit under section 1342,” pursuant to § 1369(b)(1)(F). Decker v. Northwest Envt’l Def. Ctr., 568 U.S. 597, 608 (2015).

The National Association of Manufacturers, among others, challenged the WOTUS Rule in multiple U.S. District Courts; various other parties filed protective actions in various Circuit Courts. The appeals were consolidated in the Sixth Circuit and the National Association of Manufacturers intervened and then moved to dismiss for lack of jurisdiction. The government opposed dismissal, arguing the Sixth Circuit had jurisdiction in the first instance under § 1369(b)(1)(E) and (F). The Sixth Circuit denied dismissal “in a fractured decision that resulted in three separate opinions.” In re U.S. Dept. of Def., 817 F.3d 261 (6th Cir. 2016).

Meanwhile, litigation in the District Courts continued apace, with some District Courts dismissing the matters for lack of jurisdiction, and at least one holding it had jurisdiction to review the WOTUS Rule. See, North Dakota v. U.S. EPA, 127 F.Supp.3d 1047, 1052-1053 (D. N.D. Aug. 27, 2015).

 

The U.S. Supreme Court’s Opinion

 

Section 1369(b)(1) Subparagraph E and ‘Other Limitations’

Addressing first the government’s argument that review in the first instance by the Circuit Courts is required under § 1369(b)(1)’s Subparagraph (E), for review of EPA actions “in approving or promulgating any effluent limitation or other limitation under section 1311, 1312, 1316, or 1345,” the Court disagreed that the WOTUS Rule qualifies as an action approving an “other limitation” under § 1311.

To recap, Subparagraph (E) provides for exclusive appellate jurisdiction over review of EPA actions “approving or promulgating any effluent limitation or other limitation under section 1311, 1312, 1316, or 1345.” The Court, interpreting “other limitation” in context, reasoned:

. . .Congress’ use of the phrase ‘effluent limitation or other limitation’ in subparagraph (E) suggests that an ‘other limitation’ must be similar in kind to an ‘effluent limitation’: that is, a limitation related to the discharge of pollutants.

The Court went on to state that subparagraph (E) cross-references §§ 1311, 1312, 1316, and 1345 reinforces this natural reading. The Court pointed out that the unifying feature among those cross-referenced sections is that they impose restrictions on the discharge of certain pollutants. See, e.g., 33 U.S.C. § 1311 (imposing general prohibition on “the discharge of any pollutant by any person”); § 1312 (governing “water quality related effluent limitations”); § 1316 (governing national performance standards for new sources of discharges); § 1345 (restricting discharges and use of sewage sludge).

Further, even where the Court to accept the government’s expansive reading of “other limitation,” the WOTUS Rule was not promulgated “under § 1311,” which “generally bans the discharge of pollutants into navigable water absent a permit.”

. . .Rather, the WOTUS Rule was promulgated or approved under § 1361(a), which grants the EPA general rulemaking authority ‘to prescribe such regulations as are necessary to carry out [its] functions under’ the Act.

 

Section 1369(b)(1) Subparagraph (F)

The government also failed to carry the day under § 1369(b)(1)’s Subparagraph (F), which:

. . .grants courts of appeals exclusive and original jurisdiction to review any EPA action “in issuing or denying any permit under section 1342.

NPDES permits issued under § 1342 “authoriz[e] the discharge of pollutants” into certain waters “in accordance with specified conditions.” Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 484 U.S. 49, 52 (1987). The WOTUS Rule neither issues nor denies a permit under the NPDES permitting program. Because the plain language of subparagraph (F) is “unambiguous,. . .our inquiry begins with the statutory text, and ends there as well.” BedRoc Limited, LLC v. U.S., 541 U.S. 176, 183 (2004) (plurality opinion). (Parallel citations omitted.)

 

‘Functional Interpretative Approach’ and the Crown Simpson Decision

The Court rejected the government’s urging to apply what it called the “functional interpretative approach” purportedly employed in Crown Simpson Pulp Co. v. Costle, 445 U.S. 193 (1980), and which allegedly directs courts to inquire “whether agency actions are ‘functionally similar’ to permit issuances or denials.” The Court first explained that the government misconstrued Crown Simpson, in which the Court held that EPA rejection of effluent limitation set forth in a state-issued permit had “the precise effect” of “den[ying] a permit within the meaning of [subparagraph F].” Id. at 196. In contrast:

. . .[a]lthough the WOTUS Rule may define a jurisdictional prerequisite of the EPA’s authority to issue or deny a permit, the Rule itself makes no decision whatsoever on individual permit applications. Crown Simpson is therefore inapposite.

 

Subparagraph (F) and Clean Water Act Surplusage

Finally, the government’s “interpretation of subparagraph (F) would” render other provisions in the CWA surplusage.

Subparagraph (D) is one example. That provision gives federal appellate courts original jurisdiction to review EPA actions “making any determination as to a State permit program submitted under section 1342(b).” Put differently, subparagraph (D) establishes the boundaries of EPA’s permitting authority vis-à-vis the states. Under the government’s functional interpretive approach, however, subparagraph (F) would already reach actions delineating the boundaries of EPA’s permitting authority, thus rendering subparagraph (D) unnecessary:

. . .Absent clear evidence that Congress intended this surplusage, the Court rejects an interpretation of the statute that would render an entire subparagraph meaningless. As this Court has noted time and time again, the Court is ‘obliged to give effect, if possible, to every word Congress used.’ Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979). (Parallel citation omitted.)

 

Conclusion and Implications

National Association of Manufacturers’ clarification that all challenges to the 2015 WOTUS Rule and any subsequent iterations of the Rule must first be brought in District Courts means that final certainty regarding CWA scope is years away. The Sixth Circuit had enjoined implementation of the WOTUS Rule, but that stay will now be lifted—except in 13 states, where it remains enjoined by North Dakota’s U.S. District Court. Even outside those states, the Trump administration has proposed to delay the Rule’s effective date. And the Trump administration has directed EPA to promulgate a new rule defining WOTUS, so it is unclear whether the government will continue to defend the 2015 WOTUS Rule in the District Courts. Lastly, once a new WOTUS definition has been formally adopted by the agencies, the effect of National Association of Manufacturers will be to ensure that a multiplicity of District Court rulings will flourish across the land (none with precedential force), certainly resulting in a split among the Circuit Courts that will take the Supreme Court years to resolve. The Court’s decision is available online at: https://www.supremecourt.gov/opinions/17pdf/16-299_8nk0.pdf

(Deborah Quick)