On January 22, 2018, the U.S. Supreme Court unanimously held that challenges to the 2015 Waters of the United States Rule (the “WOTUS Rule” or “Rule”) belong in district court rather than the appellate court. The WOTUS Rule was developed by the U.S. Environmental Protection Agency (“EPA”) and Army Corps of Engineers (“Corps”) to clarify which waters and wetlands fall under federal jurisdiction. Numerous parties challenged the Rule in both federal district courts and circuit courts of appeals. The circuit court actions were consolidated in the Court of Appeals for the Sixth Circuit. In 2016, the Sixth Circuit held that it had jurisdiction to hear petitions related to the legality of the Rule and issued a nationwide stay. This decision was appealed to the Supreme Court by industry groups who argued that, under the plain text of the Clean Water Act, the district courts were the proper jurisdiction.  

In an opinion authored by Justice Sonia Sotomayor, the Court noted that the Clean Water Act lists seven specific categories of EPA actions that federal courts of appeals have the exclusive power to review and the Rule did not fall into a category on the list. The Court determined that it had “no basis to depart from the [Clean Water Act]’s plain language” despite arguments by the U.S. government (forwarded by both the Obama and Trump Administrations) that the Rule was “functionally related” to categories on the list and that efficiency, national uniformity, and other policy arguments weighed in favor of making the circuit courts of appeals the appropriate jurisdiction. The Court reversed and remanded the case to the Sixth Circuit, directing the court to dismiss the petitions for review that had been filed.

Because the Supreme Court’s decision was related to jurisdiction and not the merits of the Rule, what does this mean for the Rule’s future?

First, the nationwide stay of the Rule is likely to be lifted since the Sixth Circuit has been ordered to dismiss the case and does not have jurisdiction. In anticipation of the Supreme Court’s decision and potential lifting of the Sixth Circuit’s nationwide stay, the Trump Administration has already proposed to delay the effective date of the Rule until 2020. EPA and the Corps have indicated that they want to take final action on this proposal by early 2018. If the Sixth Circuit’s stay is lifted before the effective date delay is final, it could result in the WOTUS Rule becoming effective for a period of time. However, parties are almost certain to seek stays from district courts. A North Dakota district judge already issued a stay of the Rule in thirteen states before the Sixth Circuit issued its stay, so the Rule may continue to be stayed in those thirteen states, and opponents of the Rule would likely seek to have that injunction applied nationwide.

Second, the several district court cases challenging the Rule which were on hold may be restarted. However, these cases may have a short life. The Trump Administration has already announced plans to rescind the WOTUS Rule and to re-codify the regulatory definition that existed prior to 2015 (Step 1), followed by a second outreach period and rulemaking to propose a new definition of “waters of the United States” (Step 2). EPA is already in the process of reviewing the comments on the Step 1 proposal, but, according to comments by EPA staff, EPA likely won’t make a final decision on Step 1 until March 2018. The Step 2 rulemaking would follow that decision.

In the meantime, the Supreme Court’s decision should be good news for anyone who needs to challenge the Rule because district courts are closer to where the Rule impacts local landowners and facilities and because there are more opportunities for review by higher courts. But, as noted above, this benefit may be moot if the Trump Administration acts quickly to rescind the Rule and issues a new proposal. Watch this space for additional updates.