The Nickel Report

Today, EPA and the Corps released a highly anticipated proposal to rescind the Obama Administration’s controversial 2015 Clean Water Rule. The June 2015 rule, which has been stayed since October 2015, would broadly define the scope of “waters of the U.S.” (WOTUS) subject to federal regulation and permitting requirements under the CWA. The proposed rescission is the first step of a two-step process to repeal and replace the 2015 Clean Water Rule with a new WOTUS rule. With today’s proposal, EPA and the Corps are proposing to officially rescind the 2015 rule and continue to implement the regulatory definition in place prior to the 2015 rule while they work to promulgate a new rule to define WOTUS.

On February 28, 2017, President Trump signed an Executive Order (“EO”) that set into motion a process for the EPA Administrator and the Assistant Secretary of the Army for Civil Works (jointly, the “Agencies”) to review the 2015 Clean Water Rule. The EO directed the Agencies to review the 2015 rule for consistency with the policies set forth in the EO and, as appropriate, publish a proposed rule rescinding or revising the 2015 rule.

The 2015 Rule was challenged in multiple courts by all sides (31 states and 53 non-state parties, including eNGOs, local and municipal entities, farmers, landowners, developers, businesses, and recreation groups). The parties raised numerous substantive and procedural concerns with the Rule, including claims that the Rule allows the Agencies to assert jurisdiction beyond what the CWA allows, imposes burdensome regulatory uncertainty, was not promulgated in accordance with the Administrative Procedure Act and other procedural requirements, and is otherwise unlawful. The U.S. Court of Appeals for the Sixth Circuit issued a nationally applicable stay of the 2015 rule on October 9, 2015, finding that the petitioners had demonstrated “a substantial possibility of success on the merits of their claims.” Since the 2015 rule has been stayed, the Agencies have continued to implement the regulatory definition in place prior to the 2015 rule, consistent with Supreme Court decisions, agency guidance, and longstanding practice.

In the meantime, the Supreme Court granted certiorari on a petition to review the Sixth Circuit’s February 2016 decision that the courts of appeals (and not the district courts) have exclusive jurisdiction over challenges to the 2015 rule under the CWA’s judicial review provision, § 509(b). The Supreme Court is scheduled to hear oral argument in NAM v. Dept of Defense, et al., in its Fall 2017 term. The Sixth Circuit has held briefing on the merits of the 2015 rule in abeyance pending the Supreme Court’s disposition of the jurisdiction issue. If the Supreme Court sides with petitioners and determines that district courts are the appropriate venue for challenges to the 2015 rule—and therefore that the Sixth Circuit does not have jurisdiction over the challenges—the nationwide stay issued by the Sixth Circuit would be lifted.

The uncertainty of the nationwide stay is part of the driving force behind the two-step process to repeal and replace the 2015 rule. Today’s proposal would officially rescind the 2015 rule by removing the rule text from the Code of Federal Regulations. The proposal clarifies that when the repeal is final, the agencies will continue to implement the regulatory definition in place prior to the 2015 rule while they work to promulgate a new rule to define WOTUS. The proposal is scheduled to be published in the Federal Register tomorrow, and will allow interested parties 30 days to provide comments.

The Agencies have already begun work on the more complicated second step—a replacement WOTUS rule. As directed by the EO, the Agencies plan to propose a new definition that would replace the approach in the 2015 rule, taking into consideration the principles that Justice Scalia outlined in the Rapanos plurality opinion. Consistent with its federalism consultation obligations, EPA has reached out to states and local governments to seek their input on a new WOTUS definition. Comments submitted by numerous states and state groups show support for rescinding the 2015 rule, but do not necessarily show a consensus on a different approach for defining WOTUS. As the Agencies work toward a new rulemaking in the months to come, it will be critical for regulated parties to weigh in to ensure that a new WOTUS rule provides much needed regulatory certainty.