Energy and other project developers take note: Clean Water Act's reach still uncertain following multiple developments in Q1 2018

Image of oak trees reflected in water, Clean water act

Energy Alert


Events in the first quarter of 2018 demonstrate that the breadth of the federal Clean Water Act (CWA), including the meaning of "waters of the United States" – which has bedeviled courts, environmental activists and energy and other project developers for decades – continues to be subject to ongoing judicial, regulatory and executive uncertainty. This uncertainty is significant because even something as mundane as cutting down a tree on what appears to be dry land can instead be deemed to be an action taking place in waters of the US and thus bring a project within the jurisdiction of the CWA. A surprising proportion of development projects are thus potentially subject to the time-consuming CWA permitting process.

Earlier this year, DLA Piper published a client alert discussing a recent decision by the US Supreme Court, National Association of Manufacturers v. Department of Defense, that is likely to ensure that the existing uncertainty regarding the scope of waters of the United States regulated under the CWA will continue for at least several more years. The Supreme Court held that suits challenging the Obama Administration's Clean Water Rule must be brought in federal district courts and not the federal circuit courts, which resulted in the negation of the Sixth Circuit's nationwide stay of the Clean Water Rule.

Given the disparate interpretations of the Clean Water Rule by various district courts, the Supreme Court's decision seemed likely to result in a more fractured application of the Rule across the 94 federal judicial districts – which in turn would make it more difficult for the regulated community to understand which development activities will require CWA permits.

However, on January 30, 2018, just a few days after the Supreme Court's decision in National Association of Manufacturers, the US Environmental Protection Agency (EPA) announced that it was suspending the Clean Water Rule for two years. At the time of the suspension, EPA Administrator Scott Pruitt stated that the Trump Administration would instead craft its own version of the Clean Water Rule, which is expected to include much less stringent requirements.

"Today, EPA is taking action to reduce confusion and provide certainty to America's farmers and ranchers," Mr. Pruitt said in a statement when announcing the suspension. "The 2015 [Clean Water Rule] developed by the Obama administration will not be applicable for the next two years, while we work through the process of providing long-term regulatory certainty across all 50 states about what waters are subject to federal regulation."

Within days of the EPA's announcement, 10 states and the District of Columbia sued Mr. Pruitt and the EPA in federal district court for the Southern District of New York seeking to overturn the suspension of the Clean Water Rule. The suit argues that in suspending the Rule, Mr. Pruitt and the EPA violated federal law by taking action "with inadequate public notice, insufficient record support and outside their statutory authority."

New York State Attorney General Eric Schneiderman – one of the architects of the federal lawsuit – said, "The Clean Water Rule is a common sense application of the law and the best science to protect our waters. The Trump Administration's suspension of these vital protections is reckless and illegal. That is why I will lead a multi-state coalition that will sue to block this rollback in court."

Then, on March 30, 2018, exactly two months after the EPA announced the suspension of the Clean Water Rule, Mr. Pruitt issued a directive giving himself much greater authority over "waters of the United States" under the CWA.

The one-page memo eliminated the authority of EPA career regional staff to make special CWA "determinations of geographic jurisdiction." Instead, Mr. Pruitt re-delegated that authority to the DC-based assistant administrator for the EPA's Office of Water.

Any project that discharges dredged or fill materials into water of the US must obtain a permit issued by the Army Corps of Engineers under Section 404 of the CWA. Prior to Mr. Pruitt's March 30 memo, EPA career regional staff had the ability to review and potentially veto such permits if it was determined that the project would result in unacceptable adverse environmental impacts to a body of water or wetland. Mr. Pruitt's directive eliminates that local control and allows Mr. Pruitt (or his successor) much greater influence over the potential development of energy and other major industrial or infrastructure developments throughout the US.

On the heels of EPA's two-year suspension of the Clean Water Rule, several environmental activists characterized Mr. Pruitt's March 30 memo as just the latest assault on the CWA.

"This action subjects safeguards for clean water across the U.S. to filtration through one politician's hands," said Kyla Bennet, a director of Public Employees for Environmental Responsibility. "Every corporation that wants a pass on Clean Water Act compliance is invited to meet privately with the most user-friendly EPA administrator in history."

The EPA, on the other hand, downplayed the significance of the change in policy directed by Mr. Pruitt's March 30 memo

"This memo explains that jurisdictional determinations that raise significant issues or technical difficulties should be handled in a consistent and uniform manner, particularly during the [Clean Water Rule] rulemaking," said EPA spokeswoman Liz Bowman. "Regions will absolutely be involved in the process and work closely with the Administrator's office when doing the work to assess jurisdiction for very select, and often rare, cases."

Precise reach of CWA will remain murky

In light of these continuing judicial, regulatory and executive uncertainties, predicting the precise reach of the CWA in the coming years will remain challenging. It appears likely that it will be years before any centralized definition of the CWA's scope will be finally reached – and until then its precise contours will be murky at best.

This immediate uncertainty means that the analysis of the application of the CWA to any particular project will require an even more intense evaluation of relevant facts and local jurisprudential and regulatory authority. It will be critical for developers that expect to discharge materials into even the smallest bodies of water (or even those undertaking a project on what appears to be dry land) to make sure that they understand CWA enforcement in states and regions where they operate, or risk running afoul of the CWA's permitting and other compliance requirements.

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