By Jeremy B. Fancher, Neil S. Hyytinen, & Sabrina D. Johnson
August 31, 2023
UPDATED: U.S. agencies issued their amended final rule regarding changes mandated by the Sackett decision. Read more here.
In a highly anticipated decision, the U.S. Supreme Court significantly narrowed federal jurisdiction over wetlands and bodies of water under the Clean Water Act (“CWA”). The ruling in Sackett v. Environmental Protection Agency stands to deregulate millions of acres of U.S. wetlands and potentially open these areas for development.
However, the ruling is limited to federal law. In California—with its broader regulations over waters and wetlands—the repercussions of the Sackett decision will be nuanced. Californians will navigate an environment marked by both eased federal oversight and enduring state-level regulation.
For California’s developers and builders, this decision could potentially ease identification of properties encumbered by the CWA and reduce permitting requirements. Implementation, however, depends on pending issuance of a final rule by the Environmental Protection Agency (“EPA”) and U.S. Army Corps of Engineers (“USACE”) who are tasked with defining what is and is not subject to federal jurisdiction. A final rule is expected by September 1, 2023.
Implications for California
For California, a state known for its environmental regulations, this decision could spur adjustments to its enforcement strategy. California’s regulations related to water resources are primarily guided by the Porter-Cologne Water Quality Control Act, enacted in 1969. This act, which defines “waters of the state” very broadly with no physical descriptors or interstate commerce limitation, governs discharges that could affect the quality of surface or groundwater, regardless of the specific location of the proposed activity. In contrast, the CWA stipulates that each “water of the U.S.” must have a connection to interstate commerce, thereby limiting federal jurisdiction.
The Porter-Cologne Act serves two main functions: water quality control planning and waste discharge regulation. The statute identifies the nine major hydrologic basins in California, establishing Regional Water Boards responsible for each basin. These boards adopt a water quality control plan for their respective basins that identifies beneficial uses of all waters in the basin, specifies numeric and narrative water quality objectives necessary to protect those uses, and presents an implementation strategy.
The Porter-Cologne Act mandates that anyone planning to discharge waste where it could affect waters of the state must first notify the Water Boards. The boards are then responsible for identifying sources of pollutants threatening the quality of the state’s waters and imposing requirements to control the discharge of these pollutants in permits.
While the federal jurisdiction over wetlands has been reduced, the Porter-Cologne Act’s broad jurisdiction over any activity that could affect the quality of California’s waters remains intact. These state-level protections, which extend to any surface or groundwater within California’s boundaries, encompass many bodies of water and wetlands not under federal jurisdiction. Despite the narrowed federal jurisdiction, California is expected to continue to enforce, or even increase, its state-level protections to preserve its diverse wetland ecosystems.
Projects in California that could impact the quality of waters of the state may require both state and federal permits, depending on whether it falls under federal jurisdiction. For instance, a project affecting wetlands covered by the CWA would require a section 404 permit from the USACE and a section 401 water quality certification from the State Water Board. Conversely, projects affecting waters of the state outside of federal jurisdiction would only require approval from the Water Boards through WDRs.
Clean Water Act Background
The CWA is the primary federal law protecting the quality of the U.S. surface waters, including lakes, rivers, and coastal wetlands. Before its passage, cities routinely discharged raw sewage and industrial facilities disposed chemical waste directly into lakes, rivers, and streams. The CWA began regulation of discharges to “navigable waters,” defined as “waters of the United States, including the territorial seas.” The interpretation of the terms “navigable waters” and “waters of the United States” (“WOTUS”) gave the EPA authority to regulate the discharges of pollutants from “point sources” or dredged or fill material, as well as spills of oil and hazardous substances.
Supreme Court Decision
In the case at hand, Sackett v. EPA, Michael and Chantell Sackett bought property near Priest Lake, Idaho, in 2004 and began preparing it for construction. The EPA alleged that the Sacketts had violated the CWA due to the presence of protected wetlands on their property, starting a legal battle that lasted two decades.
The Sackett case challenged the EPA and the USACE’s use of the “significant nexus” test to determine federal jurisdiction over “adjacent” wetlands. Under that test, federal jurisdiction extended to any wetlands adjacent to WOTUS so long as there was a “significant nexus,” meaning the wetlands “either alone, or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of those waters.” (Sackett at p. 1331). The Supreme Court found that this test could, in theory, be applied to “almost all waters and wetlands across the country,” creating a vast area of potential federal regulation.
In the majority opinion, the Court eliminated the “significant nexus” test. The decision held that the mere presence of water in an area is not sufficient for federal agencies to assert jurisdiction over wetlands as “waters.” Instead, federal jurisdiction applies only to those wetlands with “a continuous surface connection to bodies that are WOTUS in their own right.”
The ruling in Sackett v. EPA poses extensive implications. It substantially narrows the reach of the CWA, potentially easing the development of land with wetlands that do not have a continuous surface connection to WOTUS, and some industry groups argue it could offer relief to the nationwide housing crisis.
However, this decision may also prompt other states and local authorities to enforce their environmental laws more stringently. States may also be prompted to rewrite their laws to backfill the narrowed CWA reach.
This decision is the first major environmental ruling by the current Supreme Court, signaling a potential shift in the power dynamics between federal regulatory agencies and state authorities. It could potentially set the tone for future decisions, including the expected 2024 case, Loper Bright Enterprises v. Raimondo, which involves a challenge to a rule issued by the National Marine Fisheries Service. This case could lead to the overturning of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., a landmark decision that requires courts to defer to agency interpretations of statutes that they administer, further restricting the authority of regulatory agencies in the environmental sector.
We will continue to monitor both federal and state actions, including the issuance of the EPA’s final rule on September 1, 2023, and will provide updated guidance on complying with the shifting patchwork of wetlands and water regulations. If you have any questions about the current state of environmental regulations in California, don’t hesitate to contact Jeremy Fancher, Neil Hyytinen, or Sabrina Johnson at email@example.com, firstname.lastname@example.org, or email@example.com.