The Nickel Report

A second district court has agreed that challenges to the 2015 Waters of the United States (WOTUS) Rule are likely to succeed on the merits. The US District Court for the Southern District of Georgia issued an order on June 8 enjoining the WOTUS Rule in 11 states. Georgia v. Pruitt, No. 2:15-cv-00079 (S.D. Ga. 2018). The rule was previously enjoined by the US District Court for North Dakota in 13 states. North Dakota v. U.S. EPA, 127 F. Supp. 3d 1047 (D.N.D. 2015). The US Environmental Protection Agency (EPA) and the US Army Corps of Engineers (Corps) (“the Agencies”) recently promulgated a new applicability date for the 2015 WOTUS rule (Applicability Rule), preventing its implementation until February 2020, but there have been several lawsuits challenging the Applicability Rule. Now, regardless of the outcome of challenges to the Applicability Rule, the 2015 Rule cannot be applied in 24 states[1] until a court issues a final decision on the merits, either upholding or invalidating the Rule, or the Agencies finalize a repeal and/or replacement of the 2015 Rule.

The states argued that the WOTUS Rule violates the Clean Water Act (CWA), Administrative Procedure Act (APA), Commerce Clause and Tenth Amendment, and that the states were, therefore, entitled to injunctive relief. To obtain a preliminary injunction, a plaintiff must establish that: (1) they are likely to succeed on the merits; (2) there is a substantial threat of irreparable harm; (3) the balance of equities tips in the plaintiff’s favor; and (4) an injunction is in the public interest. See Winter v. Nat. Res. Def. Council, 555 U.S. 7, 24 (2008).

Likelihood of success on the merits: The Georgia district court agreed with the states, finding they demonstrated a likelihood of success on the merits with regard to three claims. During a hearing on the states’ motion, the government did not oppose the states’ position that they are likely to succeed on the merits of their claims, acknowledging that the Trump administration is in the process of reconsidering the 2015 Rule.

• Tributary definition likely violates the CWA. The states argued that the 2015 Rule’s tributary definition violates the CWA because it failed to meet the standards set forth in the Supreme Court’s Rapanos and SWANCC decisions. Even under Kennedy’s Rapanos concurrence, which is controlling in the Eleventh Circuit, the court found the 2015 WOTUS Rule went too far. The tributary definition “covers a trace amount of water so long as ‘the physical indicators of a bed and bank[] and an ordinary high water mark’ can be found,” but this definition, the court held, is similar to the one invalidated in Rapanos, and “seems ‘to leave wide room for regulation of drains, ditches, and streams remote from any navigable-in-fact water.’” The court’s conclusion could support the Agencies’ development of a narrower tributary definition in a new rulemaking.
• Asserting jurisdiction over remote and intermittent waters likely violates the APA. The court agreed that the WOTUS Rule is arbitrary and capricious under the APA because the Rule asserts jurisdiction over remote and intermittent waters without evidence that they have a nexus with any navigable-in-fact waters.
• WOTUS Rule fails to meet “logical outgrowth” test, likely violating the APA. Under APA principles, the final rule must be a “logical outgrowth” of the proposed rule to allow interested parties to meaningfully participate in the rulemaking. The court concluded that the 2015 Rule failed to meet this test “in significant ways.” For example, the proposed rule gave no indication that it would treat farmland differently for purposes of exempting waters from the “adjacency” category.

Substantial threat of irreparable harm: The court found that, although it was a “closer call,” the states satisfied the requirement to show a substantial threat of irreparable harm. Citing the Agencies’ estimate that CWA jurisdiction would increase by approximately 2.84% to 4.65%—a figure the states viewed as a serious underestimation—the court concluded that the States provided sufficient evidence to demonstrate they would suffer irreparable harm, including the loss of sovereignty over certain intrastate waters and costs associated with an expansion of federal CWA jurisdiction (e.g., the issuance of additional state certifications and additional National Pollutant Discharge Elimination permits). The court rejected the Agencies’ argument that such harms are not “actual or imminent” because the Rule could go into effect if it is not repealed or replaced by February 6, 2020, or if a court invalidates the Agencies’ Applicability Rule.[2]

Balance of Equities: The court found that the balance of equities (the third factor) easily tipped in favor of the states due to their loss of sovereignty and unrecoverable monetary losses. And, finally, with regard to the fourth factor, the court held that an injunction favors the public interest. In particular, if the 2015 Rule became effective before a final decision on the merits, “farmers, homeowners, and small businesses will need to devote time and expense to obtaining federal permits—all to comply with a rule that is likely to be invalidated.”

Implications for Ongoing Litigation and Anticipated WOTUS Step Two Rulemaking

Multiple challenges to the 2015 Rule are underway across the country. The coalition of states led by North Dakota has moved for summary judgment in the North Dakota district court, and briefing in that case will continue over the summer. Briefing on the merits may proceed in the near future in Georgia. And, two other district courts are considering motions for preliminary injunction, raising the possibility that the WOTUS Rule could be enjoined in additional states and/or nationwide.

Meanwhile, the Agencies are working to finalize a repeal of the 2015 Rule and to propose a new rule defining WOTUS. The Georgia court order will be influential as the Agencies develop a replacement rule and while other courts consider challenges to the 2015 Rule.

[1] Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Kansas, Kentucky, Missouri, Montana, Nebraska, New Mexico, Nevada, North Carolina, North Dakota, South Carolina, South Dakota, Utah, West Virginia, Wisconsin, and Wyoming

[2] In February 2018, the Agencies issued a rule delaying the applicability date of the Rule until February 6, 2020. Multiple challenges to the Agencies’ delay rule are underway.