The Supreme Court’s unanimous ruling in National Association of Manufacturers (NAM) v. Dept. of Defense, et al., on Monday, January 22, 2018 will make the already long, drawn-out battle over the Waters of the United States (WOTUS) Rule even longer and more convoluted.  The Court’s decision did not address the perennial question of the substance of the WOTUS Rule (i.e., the definition of “waters of the United States”), but rather decided whether district courts or federal circuit courts of appeals have jurisdiction to hear challenges to the Rule.  In finding that district courts are the proper venue for such challenges, the Court adhered to established principles of statutory construction, even conceding that the interests of judicial efficiency could not overcome the plain language of the Clean Water Act (CWA).

NAM, along with several states and environmentalists, had argued that the WOTUS Rule does not fall within any of the seven categories of circuit court jurisdiction explicitly set forth in the CWA § 1369(b)(1) and, therefore, that district courts have exclusive jurisdiction to hear challenges to the Rule.  The EPA and Army Corps of Engineers, on the other hand, asserted that subsections (E) and (F) of CWA’s jurisdictional provision should be interpreted to give circuit courts jurisdiction over WOTUS Rule challenges.  Subsections (E) and (F) respectively grant original jurisdiction to circuit courts for challenges to 1) “any effluent limitation or any other limitation” promulgated under Section 1311 of the CWA and 2) any EPA action “in issuing or denying any permit under Section 1342.”  The government urged the Court to consider the practical effects its decision could have on judicial efficiency and national uniformity and, based on such considerations, to interpret the jurisdictional provision broadly.  Specifically, the government argued that a broad interpretation would eliminate a layer of judicial review and ensure that related agency actions were routed through the same judicial channels.

The Court rejected both of the government’s assertions.  First, the Court found that the WOTUS Rule is not an “effluent or other limitation” promulgated under Section 1311.  The Court reasoned that Congress intended the “other limitation” language to mean other limitations “similar in kind to an ‘effluent limitation’: that is, a limitation related to the discharge of pollutants.”  The Court noted that Congress’s cross-reference to Sections 1311, 1312, 1316, and 1345, which all restrict the discharge of pollutants, “reinforces this natural reading.”  Moreover, the Court noted that regardless of whether the “other limitation” language of § 1369(b)(1)(E) is read broadly or narrowly, the WOTUS Rule is not a limitation promulgated “under section 1311.”  The Court found the “under section 1311” requirement is “most naturally read” to require approval or promulgation “pursuant to” or “by reason of the authority of” § 1311.  Finally, the Court rejected the government’s “practical-effects” test, finding that the express statutory text clearly grants circuit courts jurisdiction over the approval or promulgation of an effluent or other limitation, not over “EPA actions that have the ‘legal or practical effect’ of making such limitations applicable to certain waters.”

Next, the Court found that the WOTUS Rule is likewise not covered by § 1369(b)(1)(F), because the Rule itself neither issues nor denies a NPDES permit.  While the Court acknowledged that the WOTUS Rule may “define a jurisdictional prerequisite of the EPA’s authority to issue or deny a permit,” it stressed that this is in no way equivalent to issuing a decision on an actual, individual permit application.  Thus, the Court “decline[d] the Government’s invitation to override Congress’ considered choice by rewriting the words of the statute.”

In embracing a strict textual interpretation of the CWA’s jurisdictional provision, the Court disregarded pleas to base its decision on practicality.  The Court acknowledged that district court review could cause delays and lead to conflicting outcomes.  Nevertheless, it recognized that judicial efficiency and national uniformity were not the only considerations Congress balanced when drafting the statute.  Thus, while admitting that it “might [have drafted] the statute differently,” the Court found that such practical considerations could not justify a departure from the plain language of the statute.  Interestingly, the Court’s decision supported what many of us environmental lawyers have known for a long time—the CWA is illogical as written.  Writing for the Court, Justice Sotomayor conceded that the government’s arguments based on practical considerations carried “logical force.”  Nonetheless, she and her brethren ultimately felt bound to comply with Congress’s express, if illogical, intent as evidenced by the clear statutory text.

Where does this leave the current state of play for the WOTUS Rule?  In short, fasten your seatbelts.  District court litigation that had been on hold will kick into gear in multiple jurisdictions.  The Sixth Circuit will likely dissolve its injunction over implementation of the Obama-era Rule, although it isn’t clear how quickly it will take that action.  The administration’s efforts to repeal and replace the WOTUS Rule will continue on a parallel track, with every step taken in that process likely to be challenged (in district courts, of course) by stakeholders on all sides.  These rulings will slowly percolate up to the circuit courts and, eventually, back to the Supreme Court.  In the meantime, the Corps and EPA will adjudicate Section 404 permits under the “old” Rule, as modified by the “new” interpretation championed by current political leadership.

Permit applicants hoping for regulatory certainty would be better off purchasing a Powerball ticket—the odds of success are probably about the same.  The sad history of Section 404 of the CWA continues to be written, with no end in sight.