Supreme Court Clarifies and Limits Definition of Waters of the United States
Just before the Memorial Day holiday, the housing and construction industry received what is, at least in the long run, welcome news. The Supreme Court of the United States ruled against the U.S. EPA in Sackett v. Environmental Protection Agency. The ruling is significant for any owner of land that is near a water body; and it represents a major change in law and policy going forward.
The decision narrows the interpretation of kinds of wetlands that will be subject to federal jurisdiction under the Clean Water Act (CWA) to “wetlands with a continuous surface connection to bodies of water that are ‘waters of the United States’ in their own right.” The opinion, which was authored by Justice Samuel Alito, stated that the EPA’s and U.S. Army Corps of Engineers’ previous interpretation of what wetlands and other “waters of the United States” (WOTUS) were covered by the CWA was “inconsistent” with the federal statute’s text and structure.
Starting after 2006, when federal jurisdiction over wetlands was litigated at the Supreme Court during the Bush Administration (Rapanos v. United States), EPA and the Corps of Engineers had relied on a practice known as the “significant nexus” test to determine what land might constitute jurisdictional wetlands in sufficiently close proximity to navigable waters. For many housing projects, both obtaining a determination under and then complying with “significant nexus” test was a costly and risky undertaking, taking years to obtain necessary clearance and approvals. The May 2023 Supreme Court ruling in Sackett effectively eliminates the significant nexus test, according to industry observers and legal scholars.
In a press release, National Association of Homebuilders applauded the decision, noting “today the Supreme Court issued a unanimous decision in Sackett v. EPA that clearly redefines the scope of the CWA. The decision represents a victory against federal overreach and a win for common-sense regulations and housing affordability. It’s time for the [Biden] Administration to implement a new durable and practical definition of WOTUS that will truly protect our nation’s water resources without infringing on states’ rights and triggering additional expensive, time-consuming permitting and regulatory requirements.”
The Sackett case started in 2004, near northern Idaho’s Priest Lake. The Sacketts (a couple) purchased a residential lot that they planned to develop approximately 300 feet from the Lake. In 2007, shortly after construction began—which included filling the lot with sand and gravel--the EPA issued an administrative compliance order stating that the property contained wetlands subject to CWA protection. In 2008, the Sacketts brought suit against the EPA asserting that the agency’s jurisdiction under the CWA did not encompass their property. They believed and the Supreme Court found there was no surface water connection from their property to Priest Lake. Incredibly, the case has been in litigation for more than 15 years in lower courts; and this year’s Supreme Court ruling is its second ruling in connection with the case -- the first was in 2012!
Housing industry legal experts also noted the ruling’s sweeping sea change in what is and is not a “wetland” subject to Federal protections and noted there may be short-term delays and uncertainty for property owners who are currently seeking a “dredge and fill” permit for their property.
David Smith, Esq., land use attorney from Manatt, Phelps & Phillips and a Building Industry Legal Defense (BILD) Foundation Board member, commented that the “U.S. Supreme Court drew the brightest and most narrow regulatory boundary to date as to which resources are subject to regulation under the federal Clean Water Act (CWA)”.
Smith went on to say that “the ruling removes federal oversight of untold numbers of aquatic resources, especially in the arid West, and effectively guts a controversial Biden administration regulation that became effective in March 2023. As a result, regulation of resources other than traditional oceans, rivers, lakes and streams largely will fall exclusively to states. Further, the ruling has significant implications for developers and other landowners in complying with the federal Endangered Species Act (ESA).”
Andrew Henderson, Esq., a former General Counsel of Building Industry Association of Southern California and director of BILD who is now in private practice noted that “the really big impact [of the Sackett decision] is not so much how strictly the Supreme Court has construed the CWA’s statutory jurisdiction over wetlands that may continuously adjoin jurisdictional waters of the United States. The really big impact instead is how strictly the Supreme Court now defines the jurisdictional waters of the United States (WOTUS) in the first place.”
As noted in the case syllabus, jurisdictional ‘waters of the United States’ encompass only those relatively permanent, standing or continuously flowing bodies of water ‘forming geographic[al] features’ that are described in ordinary parlance as “streams, oceans, rivers, and lakes.” Henderson also noted that the decision will likely cause some near-term confusion and potential delays, particularly for those who are advancing projects for which they are presently seeking federal permission and for those projects already underway.
Aside from near-term, anecdotal confusion, a new, narrower Federal definition of WOTUS – one that provides clarity and eliminates regulatory overreach – is welcome for the housing and construction industry in that it should have the effect of reducing property development permit costs in some locations and reducing risk. This may be especially true in the arid West, where largely dry drainages that were heretofore considered “jurisdictional” will no longer be.
Unfortunately for property development interests and advocates, however, California has its own complex water quality protection program for wetlands and related “wet” or riparian areas near streams, rivers, and bays and the Pacific Ocean known as “State Wetland Definition and Procedures for Discharges of Dredged or Fill Material to Waters of the State.” This program became effective in May of 2020, after many years of construction industry opposition to its broad scope and time-consuming administration and project approval process.
The state wetlands program remains in effect and will still apply to many wetlands, seasonal drainage areas and riparian areas, all of which will now fall outside the Federal CWA’s scope. That said, because of the Sackett decision, some previously required and daunting federal wetlands permitting for prospective projects will no longer be required.
This is a complex regulatory and legal matter, so seek consultation from experts who specialize in land use and state and Federal water quality compliance programs. Stay tuned for more updates from CICWQ later in the year and moving into 2024, as the repercussions of this major Supreme Court decision are to be determined.
