New Rule Defining "Waters of the U.S." Draws New Battle Lines Between the Federal Government and States
The Environmental Protection Agency ("EPA") and U.S. Army Corps of Engineers ("Corps") published their Final Rule defining "waters of the United States" on June 29, 2015. The rule becomes effective on August 28, 2015. The rule was pre-published on May 27, 2015 by EPA and the Corps (the "Agencies"), and it has already received unprecedented attention. The Clean Water Act's jurisdiction relates to "navigable waters" which is defined by Congress only as "Waters of the United States or the territorial seas." This vague definition has created substantial confusion to stakeholders. A number of U.S. Supreme Court cases attempted to provide clarification, but ensuing regulatory guidance from the Agencies just seemed to muddy the water more. So the Agencies decided to do two things. First, they decided that their definition of Waters of the United States should be a duly promulgated federal rule, and second, they hoped to clear up any confusion by deeming just about anything that is wet as waters of the United States. The rule will affect many industries, including construction, agriculture, energy development and transmission, transportation, and housing. The Agencies' rule for the first time deems all tributaries to traditional navigable waters regardless of size as jurisdictional as long as it has a bed, bank and an ordinary high water mark. The universe of these features is significant. For adjacent wetlands the rules expanded the definition to include "neighboring" wetlands. A neighboring wetland includes all waters within the floodplain of, or within specified distances from the ordinary high water mark of, traditional navigable waters, their tributaries, and impoundments. While the rule provides some exceptions, such as swimming pools and some roadside ditches, the definition is widely regarded by the regulated community as greatly expanding the universe of jurisdictional waters. One day after the rules were published, two separate lawsuits were filed. In what might be considered a battle of the states versus the federal government, 22 states claim that the Final Rules usurp states' rights. In the first case, Georgia, et al. v. McCarthy, nine states, including all but two Region IV states, are plaintiffs. Claiming the rules infringe on state sovereignty, these States are asking the Court to vacate the rules. To get a flavor of the case, one of the allegations in the Georgia lawsuit states:

The Agencies' unlawful attempt to expand their authority to broad categories of non-navigable, intrastate waters and lands imposes great harm upon the States and their citizens. Once a water is determined to fall within the Agencies' authority, this determination eliminates the States' primary authority to regulate and protect that water under the State's standards, and imposes significant federal burdens upon the States. Such a federal jurisdictional finding also places significant burdens upon homeowners, business owners, and farmers by forcing them to obtain costly federal permits in order to continue to conduct activities on their lands that have no significant impact on navigable, interstate waters.

The second case, North Dakota, et al. v. McCarthy, includes 13 states. Two of the states do not have delegated NPDES permitting authority under Section 402 of the Clean Water Act. They allege, among other things, that Agencies failed to meaningfully consult with the states and the rule will place a burden on those states by requiring much more permitting. One of the allegations states:

The Final Rule will harm the States in their capacity as owners and regulators of the waters and lands within their respective boundaries. The States' use and management of the waters and lands they own or regulate will be subject to greater federal regulation under the Final Rule.

While states have been parties to other environmental lawsuits challenging the federal government, these lawsuits are somewhat unprecedented in the appeal for State's rights and the 10th Amendment. The battle lines are now drawn by 22 states. Based on comments to the Proposed Rule, it is clear that a number of other states are with them in spirit. Of course, it is expected that industry groups will also challenge the rule, but these cases highlight what many states believe is an erosion of the concept of cooperative federalism.
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