New WOTUS Rule Attempts to End 40 Years of Ambiguity

The federal Environmental Protection Agency and the Department of the Army (“agencies”) last week attempted to complete what the U.S. Supreme Court has asked them to do: define “waters of the United States” (“WOTUS”). The New WOTUS Rule is intended to put an end to the nearly 40 years during which “Congress has done nothing to resolve this critical ambiguity, and the EPA has not seen fit to promulgate a rule providing a clear and sufficiently limited definition of the phrase.” See Sackett v. E.P.A., 566 U.S. 120, 133 (2012) (Alito, J. concurrence). The purpose of the New WOTUS Rule is to define the jurisdictional reach of the federal government under the Clean Water Act.

This final rule replaces the 2015 Rule promulgated by the Obama Administration but enjoined in half of the states (excluding California). The New WOTUS Rule serves to memorialize judicial interpretations of WOTUS since 1985 and narrows what the Obama rule attempted to expand. The rule establishes categorical bright lines to define WOTUS as:

1. the territorial seas and traditional navigable waters;
2. tributaries of such waters;
3. certain lakes, ponds, and impoundments of jurisdictional waters; and
4. wetlands adjacent to other jurisdictional waters (other than waters that are themselves wetlands). (Preamble, § III at 87; § III.H.3 at 275.)

Twelve categories of waters are excluded from coverage, including groundwater, ephemeral streams and pools, puddles, groundwater recharge areas, prior converted cropland and waste treatment systems. (Id., § III.A.3 at 104 et seq.) It is important to note that the exclusion for groundwater does not apply to surface expressions of groundwater, such as where groundwater discharges to the channel bed and becomes baseflow in intermittent or perennial streams. (Preamble, § III.H.3 at 275.)

The Clean Water Act, which is the basis for the new rule, provides federal authority to regulate “navigable waters.” The term “navigable waters” is defined in the statute as “waters of the United States.” However, “waters of the United States” is not defined and has been narrowed by three U.S. Supreme Court decisions – United States v. Riverside Bayview Homes, 474 U.S. 121 (1985), Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (“SWANCC”), 531 U.S. 159 (2001) and Rapanos v. United States, 547 U.S. 715, 739 (2006) (Scalia, J., plurality).

The new rule is the second step the new administration has taken to define WOTUS in a way that it contends is consistent with Congressional intent and Supreme Court directives. Step One of the new rule, referred to as the 2019 Rule, became effective on December 23, 2019 (84 Fed. Reg. 56625) and repealed the Obama Administration’s 2015 Rule because, among other things, “it appear[ed] likely that the EPA ha[d] violated its Congressional grant of authority in its promulgation of the Rule.” (Id., § II.B.4 at 33.) Obama’s 2015 Rule relied upon a nine-function test which, according to the agencies, “[t]aken together, . . . meant that the vast majority of water features in the United States may have come within the jurisdictional purview of the Federal government.” (Id. at 32.)

The New WOTUS Rule is based on the premise that “not all waters are waters of the United States.” (§ II.A at 6.)  The CWA regulates both the “nation’s waters” and “navigable waters,” but Congress only prohibited “the discharge of pollutants to the navigable waters.” (Id., § II.B.1 at 15-16.) Thus, the agencies concluded that the terms “nation’s waters” and “navigable waters” are not synonymous (id.), and that “the ordinary meaning of the word ‘waters’” does not include “areas that are dry most of the year, and which may occasionally contain ‘transitory puddles or ephemeral flows of water.’” (Id., § III at 85-86, quoting Rapanos, 547 U.S. at 733.)

Notably, in this final rule, the agencies expanded the definition of tributaries from the proposed version of the rule to address ephemeral streams more comprehensively. EPA has estimated that ephemeral and intermittent streams make up approximately 59% of all streams in the United States (excluding Alaska), and over 81% in the arid and semi-arid Southwest (Arizona, New Mexico, Nevada, Utah, Colorado and California), according to a November 2008 EPA Report that relies upon a U.S. Geological Survey National Hydrography Dataset. Under the proposed version of the WOTUS rule, an ephemeral feature, like a dry channel, “at any point along a tributary network would have severed jurisdiction upstream of the ‘break’ because the waterbody would not convey surface water to a paragraph (a)(1) water year-round or continuously for extended periods of time. 84 FR 4173-74.” (Preamble, § III.A.3 at 99.) The final rule, however, was modified to recognize ephemeral features that have a surface water connection to downstream jurisdictional waters in a typical year. (Id. at 102, 137.)  Accordingly, a “tributary” under the new rule means a river, stream, or similar naturally occurring surface water channel that contributes surface water flow to the territorial seas or traditional navigable waters in a typical year either directly or through other jurisdictional waters or adjacent wetlands . (Final Rule 40 C.F.R. § 120.2; Preamble, § III.A.3 at 109.) The final rule excludes from jurisdictional waters ephemeral flow, namely “surface water flowing or pooling only in direct response to precipitation (e.g., rain or snow fall).” (Final Rule 40 C.F.R. § 120.2.) Thus, the deciding factor is always to determine if a “break” blocks or allows for the contribution of surface water flow to a downstream jurisdictional water in a typical year. (Preamble, § III.A.3 at 102-3.) A typical year is defined “to mean when precipitation and other climatic variables are within the normal periodic range (e.g., seasonally, annually) for the geographic area of the applicable aquatic resource based on a rolling thirty-year period.” (Final Rule 40 C.F.R. § 120.2.)

The new rule expressly covers perennial tributaries, which are defined “to mean surface water flowing continuously year-round” and intermittent streams, which are defined to mean “surface water flowing continuously during certain times of the year and more than in direct response to precipitation (e.g., seasonally when the groundwater table is elevated or when snowpack melts).” (Final Rule 40 C.F.R. § 120.2.) The term “certain times of the year” is intended to “include extended periods of predictable, continuous surface flow occurring in the same geographic feature year after year.” (Preamble, § III.A.2 at 94.)

Under all of these definitions, the determination of “surface water flow” will require a detailed analysis, using various tools including USGS maps, state and local knowledge or maps, aerial photographs, and models like “Flow (Raindrop) Path,” a GIS tool that allows a user to click a point on a map to signify a falling raindrop on that point, after which a flow path is drawn to estimate where the raindrop may flow. (Id., § III.D.3 at 157.)

Likely Challenges to the Rule

At this time, both environmental and industry groups have either filed new complaints or sought to supplement existing complaints to challenge the Step One Rule – the 2019 Rule – in whole or in part, and these challenges are pending in six district courts. (Preamble, § I.D at 41, see e.g., New York v. Wheeler, No. 19-11673 (S.D.N.Y., complaint filed Dec. 20, 2019); Wash. Cattlemen’s Ass’n v. EPA, No. 2:19-cv-00569 (W.D. Wash., supplemental amended complaint filed Dec. 20, 2019). The New WOTUS Rule, however, may not be as easy to enjoin as Obama’s 2015 Rule because, unlike the Obama Rule, the New WOTUS Rule is designed to reduce the scope of regulation whereas the 2015 Rule was successfully enjoined because it exceeded the agencies’ jurisdiction.

Effect of New WOTUS Rule

Under the New WOTUS Rule, some waters that were jurisdictional will become non-jurisdictional. However, it is too early to tell exactly what the impact of  the new rule will be, particularly in California where the Porter-Cologne Water Quality Act regulates all surface and ground waters. All permanent streams and tributaries – perennial and intermittent – continue to be covered under the new rule along with all ephemeral streams that have a surface flow connection in a typical year. Ephemeral streams without a surface flow connection in a typical year are not covered, but these are likely to be small headwaters of tributaries located upstream from perennial streams. Often such headwaters are located in elevated mountain regions, where development is unlikely and regulated point source discharges are more rare.

In practice, in California, the regulated community will be subject either to CWA requirements or those under Porter-Cologne. Enforcement varies considerably between the two. For illegal discharges to jurisdictional waters or other similar violations, enforcement under the federal CWA carries substantial daily penalties typically of $55,800 per day (after the penalty inflation adjustments in 40 C.F.R. § 19.4). In contrast, illegal discharges to non-jurisdictional waters or other similar violations would instead trigger state penalties, which are generally lower, ranging from approximately $15,000 to $25,000 per day under sections 13350 and 13385 of the California Water Code. Notably, violations associated with non-jurisdictional waters will not be subject to CWA citizen suits, which undoubtedly will provide new defenses for defendants who face such suits.

Also, the regulated community must keep in mind that many non-jurisdictional features – like dry channels or stormwater control features – can still be regulated as “point sources” under the CWA. The agencies explained “that a CWA section 402 permittee currently discharging to a jurisdictional water that becomes non-jurisdictional under this final rule would likely remain subject to the requirements of the Act. . . . [as] a point source to a ‘water of the United States.’” (Preamble, § III.H at 253, 269.)

Ultimately, the new rule forces states to regulate state waters because it establishes a boundary between “waters of the United States” and waters subject “solely to the State and tribal authority.” (Id., § II.E.3 at 73-74.) The new rule may provide more clarity, but it does so within a statutory framework that is complex and will remain so for decades to come.