Supreme Court Settles Jurisdictional Issue and Lifts Nationwide Stay of WOTUS Rule

The Supreme Court, in a unanimous opinion authored by Justice Sotomayor, resolved the issue over which federal court has jurisdiction to hear legal challenges to the 2015 “waters of the United States” Rule (“WOTUS Rule”) under the Clean Water Act (“CWA”). Reversing the 6th U.S. Circuit Court of Appeals, the Supreme Court held that lawsuits challenging the 2015 WOTUS Rule first must be brought in federal district courts because federal courts of appeals lack direct jurisdiction over those challenges. The case, National Association of Manufacturers v. Department of Defense, finally settles the jurisdictional uncertainty over the scope of the CWA’s judicial review provisions and, in effect, lifts the Sixth Circuit’s nationwide stay of the WOTUS Rule.

Typically, parties challenging a final EPA action pursuant to the Administrative Procedure Act (“APA”) file in federal district court. However, the CWA enumerates seven categories of EPA actions for which review lies directly and exclusively in the federal courts of appeals. The National Association of Manufacturers (“NAM”) challenged the WOTUS Rule in United States district courts across the country, whereas other parties filed “protective” petitions for review in various Courts of Appeals to preserve their challenges should their district court lawsuits be dismissed for lack of jurisdiction. The Sixth Circuit ordered a nationwide stay of the WOTUS Rule and held that challenges to the WOTUS Rule must be made directly to federal appellate courts, rather than district courts. The Supreme Court then granted certiorari on the jurisdictional issue. (Please see here a Meyers Nave Client Alert summarizing the procedural history of this case.)

On review, the Supreme Court framed the jurisdictional question as a discrete issue of statutory interpretation. Relying heavily on the plain language of the statute, which the high Court found was clear, the Court rejected government arguments that the WOTUS Rule fell into either of two categories of agency action that are within courts of appeals exclusive jurisdiction under the CWA: (1) approval or promulgation of “any effluent limitation or other limitation” or (2) issuance or denial of an NPDES permit under section 1342. 33 U.S.C. §1369(b)(1)(E)-(F).  The Court concluded that the WOTUS Rule, which is definitional in nature, is not an “effluent limitation” or “other limitation” similar in kind to a limitation related to the discharge of pollutants, and to read it as such would “ignore Congress’ limited grant of exclusive jurisdiction to courts of appeals under section 1369(b)(1).” Finally, the Court rejected arguments that the WOTUS Rule was “functionally similar” to issuing or denying a permit. The Court therefore reversed the judgment of Sixth Circuit and remanded the case with instructions to dismiss the petitions for review for lack of jurisdiction.

Although this decision answers the jurisdictional question regarding substantive challenges to the WOTUS Rule, the decades’-long battle over how to define “waters of the United States” under the CWA is far from over. Now that the Sixth Circuit’s nationwide stay is effectively lifted by the Supreme Court’s decision, it is anticipated that the EPA, as it has done with other environmental regulations, will expedite its efforts to repeal and replace the Obama-era rule.  Against this backdrop, the only certainty moving forward is that the saga of defining “waters of the United States” under the CWA will flow on and litigation over the issue will continue in federal district courts, and ultimately will yet again find its way to the Supreme Court.