Supreme Court Halts Expansive Test for Wetlands

In its fourth opportunity since 2001 to define what it means to be “waters of the United States” (WOTUS) under the Clean Water Act (CWA), on May 25, 2023, the U.S. Supreme Court finally breathed some measure of clarity into the definition. In an opinion authored by Justice Alito (Sackett v. Environmental Protection Agency, 566 U.S. 120 (2023)), in which the other 8 justices either joined or concurred, the Court rejected the U.S. Environmental Protection Agency and Army Corps of Engineers’ (the “Agencies”) use of a vague and subjective “significant nexus test” (SNT) to assert jurisdiction over a wetland the Corps had found to be “adjacent” to Priest Lake in Idaho, but which was in fact separated from the lake by a large roadway, a manmade ditch, and a substantial segment of a non-navigable, unnamed tributary, and also lacked any defined surface or subsurface connection with the lake. 

In its decision, the Court concluded that the SNT used to define what is a jurisdictional “adjacent” wetland is (1) inconsistent with the text of the CWA, both as written and as interpreted in prior decisions of the Court, and (2) so vague and subjective that it fails to provide fair notice to the regulated community of its obligations, while imposing potentially severe civil and criminal penalties on those who guess wrong. While unanimous in rejecting further use of the SNT for wetlands, the Court nevertheless was divided on the proper standard to be applied when determining when a wetland is sufficiently “adjacent” to a WOTUS to itself be a jurisdictional WOTUS:

1. Justices Alito, Roberts and Barrett would require that there be a continuous surface connection between the wetland and the WOTUS for the wetland to be jurisdictional. 
2. Justices Thomas and Gorsuch supported the continuous surface connection requirement, thus making a majority in support of this requirement, but they wrote separately to express their view that the term “navigable” in the CWA is not being properly followed, and they would define all WOTUS more limitedly as “waters within Congress’ traditional authority over the interstate channels of commerce.” 
3. Justices Kavanaugh, Kagan, Sotomayor and Jackson wrote separately to opine that requiring a continuous surface connection between a wetland and a WOTUS improperly narrows the statutory term “adjacent” into the term “adjoining,” and they would rely instead on the “ordinary meaning” of the word “adjacent.” 

While Sackett involved a dispute over wetlands, there is no reason to believe the Court’s view as to the validity of the SNT for determining what is an “adjacent” wetland would be any different than its view as to the continued validity of using the same test to determine whether ephemeral streams, often located miles away from the nearest WOTUS, would be any different. Thus, at a minimum, the Sackett decision also calls into question the continued use of the SNT for such streams, if not outright overruling its further use by implication. In addition, while not expressly stating so, the Sackett decision effectively overrules the Army Corps/EPA’s revised WOTUS rule issued on January 18, 2023 (88 Fed. Reg. 3004), at least with respect to the continued use of the SNT (which the Agencies had kept in the revised rule, but renamed as the “significantly affect test”) for wetlands and most likely for ephemeral streams as well. 

Starting shortly after the Supreme Court’s decision in Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps of Engineers, 531 U.S. 159, (2001), the number of rewrites (at least seven) of this important rule long ago crossed the point of sublime to the realm of bizarre. During this time, the rule has been the subject of at least four separate Supreme Court appeals, including the Sackett decision. By far the most controversial aspect of the rule has been the incredibly broad, vague and subjective SNT used to determine whether wetlands and small streams, often miles away from the nearest WOTUS, either by themselves or considered together with other “similarly situated” waters in the region, have a “substantial” effect on the chemical, biological, and/or physical integrity of a nearby WOTUS. The Court’s latest ruling eliminates this vague and subjective test, providing more certainty to developers and homebuilders. 

Based on some guiding principles offered from several members of the Court, the Agencies will have to revise their rule again, this time to focus on factors that demonstrate a direct and continuous surface connection between a wetland and a nearby WOTUS, in order for the wetland to be jurisdictional. And they’ll most likely need to adopt similar factors to show a direct and substantial connection between small ephemeral streams and the physical, chemical and/or biological integrity of a downgradient traditional WOTUS, in order for those streams to also be jurisdictional. 

It seems clear that Congress is not prepared to work across the aisle to amend the CWA anytime soon to add additional clarity to the definition of WOTUS. Thus, states that want to preserve wetlands that do not directly adjoin a waterway will have to take steps to require a state-issued permit for such grading/filling. And if the SNT is indeed invalid for further use in evaluating ephemeral streams, states will need to take steps there as well to preserve these small waterways.  In the meantime, developers and homebuilders should reevaluate (1) permit applications pending with the Corps; (2) jurisdictional determinations obtained that have not yet been acted on; and (3) delineation reports obtained from consultants, in order to determine the impact of the Sackett ruling on these important steps in the Corps’ Section 404 permitting process.