Ebb and Flow of Federal Wetlands Regulations Continues in 2023 with an Agency Ruling and Supreme Court Decision

The direction of federal governance related to wetlands protection continues to shift course as a result of two significant actions in the first half of 2023, promising to complicate efforts to identify and manage aquatic resources for the foreseeable future. The origin of this pattern of ebb and flow lies in the 1972 Clean Water Act (CWA), which gave the US Environmental Protection Agency (EPA) authority to establish water and wastewater quality standards, set limits on pollutant discharges, and implement pollution control programs.

The extent of EPA’s jurisdiction governance under the CWA was, unfortunately, not clarified within the Act itself, as it referred only to its applicability ‘within the Waters of the United States’, or ‘WOTUS’.  Instead of providing a more detailed interpretation of WOTUS, the CWA left this task up to the EPA and another federal agency with a significant stake in federal-level water management programs, the US Army Corps of Engineers (USACE).

Due to its obvious and critical importance in establishing the geographic reach of federal authority in dictating private-property water- and land-use issues, the definition of WOTUS has been the focus of fierce debate since that time.   Certain interpretations of the CWA argued that WOTUS were limited to the historically relevant concept of navigable bodies of water (e.g. those that can float a boat), and the associated assumption that smaller features were too insignificant to regulate.

However, over time, the two agencies tended to claim jurisdiction over small wetlands and watercourses which did not meet the strict navigable definition, stemming from an increased understanding of the ecological and hydrologic interconnectedness of aquatic systems.

A landmark challenge to the definition of WOTUS occurred in 2006 (Rapanos v. EPA) but resulted in a failure of the Supreme Court to reach a majority decision, effectively splitting the definition of WOTUS into two different concepts.  One concept supported the interrelated nature of aquatic systems, and defined WOTUS as any waters joined by a ‘significant nexus’; this could be a continuous surface water connection, or simply a common subsurface hydrology.

Under this concept, virtually all wetlands and waters of any type – even drainage ditches – could potentially be federally regulated.  A second concept promoted a scaled-back jurisdictional reach, limiting WOTUS to waters with a ‘relatively permanent’ connection defined by areas which have a continuous surface connection with traditional navigable waters.

The ‘relatively permanent’ concept of WOTUS was supported jointly by the EPA and USACE in the June 2020 Navigable Waters Protection Rule, which was seen as an attempt by the Trump Administration to finalize the debate and to scale back federal authority over individual land-use rights.  However, the Biden Administration reversed this action in January 2023, when the EPA and USACE published the Revised Definition of Waters of the United States, encoding the more geographically encompassing ‘significant nexus’ concept.

But even as the two agencies were working to incorporate the January 2023 ruling into their programs, a second challenge to the definition of WOTUS was heard by the Supreme Court in May 2023 (Sackett v. EPA).  In this case, the Court reached a majority decision in favor of the scaled-back definition, ruling that the ‘relatively permanent’ concept was more consistent with the intent of the CWA.

In the face of the various WOTUS rulings and reversals, Liberty and other environmental consultants engaging in natural resource identification, permitting and mitigation will continue to manage a somewhat uncertain path through an ever-changing policy landscape. The primary anticipated effects of the May 2023 Sackett decision will be the potential that USACE may re-evaluate certain prior jurisdictional determinations (JDs), the process by which the Corps concurs with a delineation made by a consultant as part of an encroachment or mitigation permitting effort.

In fact, in the wake of the January 2023 Revised WOTUS Rule, the USACE had announced earlier this year that it would no longer rely on approved JDs granted under the Navigable Waters Protection Rule.  Now, USACE will likely be forced to pivot yet again in its policy, this time in the opposite direction. Applicants for waterways-related permits subject to USACE jurisdictional reviews will have to choose between proceeding with the permit application or requesting new agency concurrence with the hope of a favorable permitting outcome.

The May 2023 Sackett decision will also be seen as a victory for land use rights, allowing private landowners and developers more flexibility and fewer potential permitting restrictions related to actions within their property boundaries.  However, any uncertainty in policy at the federal level can result in delays in state-level agency decision making, and ultimately increased project expenses.

Liberty’s knowledge of the history of WOTUS interpretations is a real asset in times of regulatory uncertainty, since the value of a detailed, scientific, and rational evaluation of aquatic resources and their supporting characteristics is greater now more than ever.  Liberty doesn’t limit its evaluation of aquatic resources to a simple delineation line; our work is based on a deep familiarity with the hydrologic, soil, and vegetative conditions supporting these resources and our extensive expertise in determining how a wetland or watercourse functions.

These strengths translate into valuable advice to our clients related to their land-use plans.  Anything less than Liberty’s superior understanding will leave owners and developers vulnerable to the continuing tidal flux of wetlands regulatory policy.