• If You Own Commercial Property, the Proposed Rule Clarifying Clean Water Act Jurisdiction Could Hamper Your Future Plans: What You Need To Know
  • July 30, 2014 | Authors: John A. Heer; Kevin Patrick Murphy
  • Law Firm: Walter - Cleveland Office
  • The proposed new rule by the U.S. EPA and U.S. Army Corps of Engineers to define "waters of the United States" under the federal Clean Water Act (CWA) could potentially have far-reaching ramifications for commercial property owners or for companies thinking of entering into a real estate transaction or simply upgrading, expanding or rezoning existing property.

    More Regulation

    The CWA prohibits the discharge of any pollutant by dumping or filling, without a permit, in "navigable waters." "Navigable waters" are defined as "waters of the United States." Over time, the U.S. EPA, the Army Corps and the courts have stretched the meaning of that phrase to include nearly any area with water in it, including man-made ditches and intermittently-flowing storm drain systems and culverts. As a result of the greater reach of CWA regulation, landowners and developers have faced numerous, expensive and time-consuming legal hurdles.

    In an effort to remove many of the uncertainties and rein in the government's expansive regulation of wetlands under the CWA, the U.S. Supreme Court, in 2006, ruled that a lower court had applied the wrong standard in reviewing the Army Corps' decisions that certain wetlands were subject to the CWA. However, the justices could not agree on the correct standard for determining what bodies of water should be regulated.

    The Proposed New Rule

    Since that time, courts have struggled to determine how to apply the various definitions of navigable waters under the CWA. In response, the EPA and the Army Corps promised to issue a new rule that would clarify the standard for identifying jurisdictional waters under the CWA. Unfortunately, the proposed rule, issued on March 25, 2014, will likely add to the confusion rather than eliminate it.

    Among other things, the proposed rule adds several categories of waters that may be regulated as jurisdictional, including "tributaries" of traditional navigable waters, wetlands "adjacent" to those tributaries, and other "adjacent" waters.

    What Is The Likely Impact?

    Although the EPA claims the proposed rule simply "clarifies" its existing jurisdiction without extending its regulatory power to any new types of waters, many legal experts believe that the rule would broaden federal jurisdiction beyond what Congress originally intended when it created the CWA, such that more properties will be regulated than ever before. Taking the most extreme interpretation, the rule could apply to nearly any body of water, no matter how insignificant or remote its connection to traditional jurisdictional waters may seem. Even using a less extreme reading, the rule would mean lengthier and costlier permitting and approval processes for many transactions. As a result of these changes, property owners and developers will need to approach any type of acquisition, development or redevelopment cautiously, knowing that there could be significant delays or hurdles to overcome throughout the approval process. Consultants and legal counsel should be brought in at the onset of any transactions in order to minimize potential project delays.

    It is important to note that the proposed new rule is subject to public comment until October 20, 2014. During this time, individuals and companies potentially affected by this rule should consider filing public comments in the administrative record.