U.S. Supreme Court Significantly Narrows Wetlands That Are “Waters of the U.S.” Under the Clean Water Act

On May 25, 2023, the U.S. Supreme Court issued its opinion in Sackett v. EPA, No. 21-45 (US May 25, 2023) (slip op.), significantly narrowing the U.S. Environmental Protection Agency’s (“EPA”) and U.S. Army Corps of Engineers’ (“Corps”) jurisdiction over wetlands under the Clean Water Act (“CWA”). The Supreme Court has now established a new test for determining if a wetland is a water of the United States (“WOTUS”): wetlands must be (1) adjacent to a river, stream, or other relatively permanent body of water connected to a traditional interstate navigable water, and (2) have a continuous surface connection with that adjacent water. This significant narrowing will result in fewer wetlands being subject to CWA permitting for dredge and fill activities, as well as other permitting and review under the CWA. The Court’s decision also brings into question the validity of the EPA and Corps’ current regulation defining WOTUS but did not expressly invalidate the regulation (the “2022 Regulation”).

Before the Court was the ongoing dispute between the Sacketts and EPA that had made its way through the federal courts over the past 15 years. The dispute was triggered by EPA’s issuance of a compliance order alleging that the Sacketts violated the CWA by placing fill on half an acre on their property that EPA claimed was a wetland subject to CWA jurisdiction due to the wetland’s proximity to Priest Lake, a navigable water. Although there was no actual surface connection between the Sackett’s property and the lake, EPA relied on past Supreme Court precedent and concluded the wetland on the Sackett’s property was subject to the CWA because it had a “significant nexus” to Priest Lake. The Sackett’s property was separated by a 30-foot-wide road from an unnamed tributary to a non-navigable creek that fed into Priest Lake. For purposes of evaluating “significant nexus,” EPA lumped the Sackett’s property together with a nearby wetland complex that, taken together, EPA alleged “significantly affected” Priest Lake.

Although the Court was unanimous in ruling that EPA had too broadly applied its CWA jurisdiction in the Sackett’s case, the Justices were split on the scope of which wetlands adjacent to navigable waters are jurisdictional WOTUS. Specifically, the five Justice majority held that the CWA only extends to those wetlands that (1) are adjacent to a river, stream, or other relatively permanent body of water connected to a traditional interstate navigable water, AND (2) have a continuous surface connection with that adjacent water.

This case is the most recent in a long history of litigation over what features are included in the term WOTUS. Prior to the Court’s decision in Sackett, the EPA and Corps often evaluated their jurisdiction over wetlands and other water features on a case-by-case basis, by determining whether the water had a “significant nexus” to a navigable stream, river, lake, or other waterbody. This case-by-case analysis gave the agencies the ability to regulate many wetlands and water features that were not physically connected to navigable waters.

The abrupt change in the scope of CWA coverage created by Sackett has provided needed clarity on wetlands that are WOTUS by clearly stating that they must have a continuous surface connection to a traditional navigable water. But the decision has left several questions unanswered. In particular, the Court did not address how the EPA and Corps should implement its holding in light of the conflicting definition of WOTUS currently in effect under the agencies’ regulations that are themselves the subject of three pending court cases and injunctions in multiple states. While the Court did not specifically address the validity of the 2022 Regulation (it did not need to as the Court focused on the statutory definition, not the regulatory interpretation), the Court’s holding effectively rejects the EPA and the Corps’ interpretation of WOTUS, particularly its use of a “significant nexus” standard and narrows the agencies’ jurisdiction. Thus, the implications for the cases currently challenging the WOTUS regulation are unclear, and the parties and courts will need to reconcile the Court’s decision in Sackett.

Further, it is unclear at this point how the agencies will approach regulation of wetlands post-Sackett. No doubt the agencies will be working this out over the coming weeks, but the Court’s decision nevertheless raises many questions, including:

• How continuous does the surface connection need to be? The Court notes that temporary interruptions would not remove a wetland from being considered a WOTUS but provided no further guidance.
• Will long-regulated waters no longer be jurisdictional, particularly those that are only separated from a water that is WOTUS by a berm, manmade dike, or beach dune?
• What effect will the Court’s holding have on other water features beyond wetlands? Although this case was limited to wetlands, the concepts of a continuous surface connection and relatively permanent waterbodies are likely to arise related to ephemeral and intermittent waters as well as manmade features like ditches and canals.
• How will EPA/Corps apply this ruling to pending administrative jurisdictional determination (“AJD”) applications and existing AJDs that were made under a broader definition than that adopted in Sackett? Will the agencies follow their prior practice that the WOTUS definition in place when the AJD was issued controls?
• What effect will the Court’s holding have on individual permits and wetlands mitigation that has not yet been implemented for wetlands that are now no longer jurisdictional?

Although the Court’s decision leaves many questions unanswered, it is safe to assume that some states will step in to fill the regulatory gap, as they have in Oregon and Washington. Neither the CWA nor this decision preempts state authority to regulate wetlands, and wetlands that are no longer subject to CWA regulation can still be protected by the states to one degree or another. Realizing the full effect of the Court’s holding will take some time, and determining whether a water that is on the edge of the Court’s holding is protected by the CWA will still require a fact-specific determination.