Court Decisions Limit Scope of EPA Wetlands Rules
Two court decisions announced last week may have a significant impact on builders and developers contemplating projects in areas near streams, lakes and wetlands subject to federal jurisdiction under the Clean Water Act.
In National Association of Home Builders v. U.S. Army Corps of Engineers, the U.S. District Court for the District of Columbia denied a motion from the Corps to dismiss a complaint from NAHB. The court held on March 26 that NAHB indeed has standing to pursue its challenge against the Corps’ Nationwide Permit 46 (NWP 46), which seeks to regulate non-tidal, upland drainage ditches.
In its examination of NAHB’s lawsuit against the Corps, the court found that NAHB had constitutional standing both as an injured party and in its capacity to represent its injured members.
NAHB challenged the Corps’ NWP 46 last May on the grounds that it seeks to regulate areas outside its jurisdiction by extending its reach to features that are not “navigable waters” under the Clean Water Act. NAHB said that the act does not grant the Corps authority over non-tidal, upland drainage ditches because they are not “navigable waters.”
Defining ‘Navigable Waters’
On March 31 in American Petroleum Institute v. Johnson, the same court ruled that U.S. Environmental Protection Agency regulations defining the term “navigable waters” are “arbitrary and capricious” under the federal Administrative Procedure Act.
The court considered EPA regulations requiring oil-producing facilities to develop spill prevention and response plans for operations that may discharge into “navigable waters” — the key term defining the extent of federal regulatory authority under the Clean Water Act. These regulations vaguely define navigable waters as including undefined tributaries, adjacent wetlands and waters that might affect interstate commerce.
After finding that the industry plaintiffs had standing, the court concluded that EPA “violated [regulations] by failing to provide a sufficiently clear, cogent and reasoned explanation for its decision to promulgate such a broad definition of ‘navigable waters.’”
The plaintiffs argued that the expansive regulations failed to consider the U.S. Supreme Court’s decision in Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army Corps of Engineers, which narrowed the extent of federal authority under the act. The oil spill regulations “cannot be regarded as a product of reasoned decision-making and must be set aside” because EPA never considered this seminal Supreme Court decision in its rulemaking proceedings.
While the district court recognized that the SWANCC decision did not establish “hard-and fast rules for determining which waters qualify as ‘navigable waters,’ it did establish that [Clean Water Act] jurisdiction is not co-extensive with Congress’ Commerce Clause authority.”
Although the case concerned regulations for the petroleum industry, the same language appears in separate regulations for developers adopted by EPA and the Corps, said NAHB Staff Vice President Duane Desiderio.
Under the Clean Water Act, builders and developers often must obtain permits from EPA and the Corps for discharging stormwater into “navigable waters” or dredged material into wetlands over which the federal government has jurisdiction.
“A raging debate among the courts, regulators and Congress has brought the issue of the scope of federal permitting authority to the fore,” Desiderio said.
“This opinion helps clarify that the U.S. Constitution sets meaningful limits, as defined by Supreme Court precedent, over those water features that must receive federal permits from the Corps and EPA,” he said. “Indeed, proposals in Congress that seek to expand the scope of federal permitting authority may be curtailed by this decision, because bill language under consideration closely tracks the regulatory language that this court has now declared illegal.”
NAHB Legal Affairs Committee volunteers and staff are continuing to study the court’s decisions.
For more information, e-mail Calli Schmidt at NAHB, or call her at 800-368-5242 x8132.