• Changing Tide for Obama-era Water Rule
  • March 14, 2017 | Authors: Joshua L. Belcher; Samina M. Bharmal; Paul C. Freeman; Jay Holloway; Susan G. Lafferty; David M. McCullough; James A. Thompson; Liz Williamson
  • Law Firms: Eversheds Sutherland (US) LLP - Washington Office; Eversheds Sutherland (US) LLP - New York Office; Eversheds Sutherland (US) LLP - Washington Office
  • On February 28, 2017, President Trump signed an Executive Order (EO) directing the withdrawal of the controversial Waters of the United States (WOTUS) Rule. The Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Army Corps) quickly issued a notice of their intent to review the WOTUS Rule and stated their position that agencies can revise a rule without a change in facts since the original rule was issued. 82 Fed. Reg. 12532 (Mar. 6, 2017). The WOTUS Rule was finalized in 2015 by EPA and the Army Corps to provide greater certainty to the regulated community about which waters would be subject to federal pollution control requirements; before the rule, such questions were decided on case-by-case bases. The Rule, however, was opposed as being overly broad and, though it was finalized, has been targeted by opponents. A withdrawal of the WOTUS Rule may lead back to case-by-case determinations for the regulated community. A withdrawal that is not based on a change of facts or circumstances could signal a shorter path for undoing other high-profile Obama-era final rules such as the Clean Power Plan.

    Substantively, the WOTUS Rule would have required federal controls, including federal permit requirements, for a significant swath of water bodies through its definition of “navigable waters,” or waters of the United States, under the federal Clean Water Act. Indeed, despite the agencies’ stated intent in promulgating the rule and the support of certain stakeholders, the WOTUS Rule was heavily criticized by some for creating uncertainty. It was challenged in federal courts across the country by 31 states, as well as farmers, ranchers, and home builder groups, before a federal court issued a stay temporarily halting its implementation.

    What impact does the EO have on the WOTUS Rule? The EO imposes two instructions that would likely result in a new rule with significantly less federal regulation. First, the EO directs EPA and the Army Corps to rescind and revise the rule. In their first steps to follow this instruction, EPA and the Army Corps issued a notice of their intent to review the rule and provide an advanced notice of a forthcoming proposed rulemaking. Second, the EO instructs the agencies to “consider” interpreting “navigable waters” more narrowly, consistent with Justice Antonin Scalia’s dissenting opinion in the split Supreme Court decision, Rapanos v. United States, 547 U.S. 715 (2006).

    What happens next for the WOTUS Rule? Environmental groups, and even industry groups concerned about upstream water quality, are already gearing up to oppose the EO and subsequent agency action. Critics of the EO argue that agencies can rescind or revise a rule only after reviewing it, and that the EO impermissibly requires EPA and the Army Corps to rescind and revise the WOTUS Rule regardless of the conclusions of their review. The EO’s instruction to use the narrower Scalia test suffers similar criticism; these groups argue that EPA and the Army Corps must decide which test to use through the public comment process, not through the President’s direction. Therefore, lawsuits are expected to ensue from any action taken flowing from the EO.

    What’s at issue beyond WOTUS? The EO on the WOTUS Rule and subsequent agency action serve as a test path for future administrations. First, the WOTUS Rule is an example of the Executive Branch’s attempts to fill in meaning for notoriously ambiguous statutory terms absent congressional direction. Regardless of the administration or approach, these attempts are often subject to attack. More significantly, however, if courts uphold any revision of the WOTUS Rule based on the same record used to promulgate it, the Trump Administration (and future administrations) may use this approach to revise other final rules inconsistent with its policy goals. While a new record may be established during a new comment period, an agency’s ability to rely solely on the pre-existing record, if upheld by the courts, shortens the path for undoing prior administrations’ rules. Such an outcome may mean shorter-lived final rules, both reducing compliance burdens for industry and introducing the potential for significant regulatory uncertainty.

    The President, the party in power, and more than half the states strongly oppose the Obama-era WOTUS Rule, but the impact of the EO is constrained by legal requirements for agency action. It remains to be seen how EPA and the Army Corps will ultimately carry out the EO, and in particular whether they will rely on the previous record or create a new record upon which to base their forthcoming action. The success of the particular methods chosen by the agencies in following the EO may signal changes for other high-profile Obama-era rules. In the meantime, regulated businesses will enter an extended period of uncertainty until the agencies take action.