The US Supreme Court in Sackett v. EPA, No. 21-454, 2023 US LEXIS 2202 (May 25, 2023), rejected the wetlands “significant nexus” test established in Rapanos v. United States, 547 US 715 (2006), a broad definition of “adjacent” wetlands, and, presumably, the newest promulgated rule that attempts to define “waters of the United States” (WOTUS). 88 Fed. Reg. 3004 (2023) (to be codified in 40 C.F.R. § 120.2, and 33 C.F.R. § 328).

In the early 1970s, the Clean Water Act (CWA) was enacted, and it is jointly enforced by the US Environmental Protection Agency (EPA) and the Army Corps of Engineers (Corps). The CWA prohibits the discharge of pollutants into “navigable waters,” a term notoriously difficult to define. In establishing the CWA’s federal permitting program under Section 404, the Corps phased in wetlands as part of “waters of the United States” through the use of aquatic and subjective factors. Courts thereafter clarified that wetlands “adjacent” to traditional navigable waters, but not “isolated” wetlands, were federally regulated rather than governed by subjective factors conferring federal jurisdiction. But the definition of “adjacent” lay in the eye of the government beholders, the Corps and EPA — thus the importance of this decision. The majority established that since adjacent wetlands are included in the definition of the “waters of the United States,” those wetlands must qualify as “waters” under the CWA in their own right.

The Court in Rapanos developed two wetlands Section 404 tests: adjacent or surface connection to flowing waters (J. Scalia) and significant nexus (J. Kennedy). The latter test was exceedingly broad, and the agencies developed a convoluted guidance manual in 2007 and 2008 using both tests. Under this guidance, the first WOTUS rule, 80 Fed. Reg. 37056 (2015), was promulgated, reinforcing the guidance. It was judicially challenged, and various courts across the country split over the rule. In 2020, the Navigable Water Protection Rule, 85 Fed. Reg. 22340 (2020), replaced the 2015 rule and eliminated the significant nexus test but still left loopholes in the adjacent test. That rule did not last long, as it was rescinded the same year and replaced by a new WOTUS rule in 2023. The latter rule primarily reiterates the 2015 rule, further broadens the “adjacent” test, and provides more detail on the significant nexus test. The rule is now being challenged in courts and is enjoined in a number of states, including Alabama, Florida, Mississippi, Texas, and Louisiana.

Then, along comes Sackett. In 2004, landowners started to develop a residential lot in an Idaho subdivision, hundreds of feet from a state lake in one direction and miles from a creek that feeds into that lake in another and separated from these waters by developed homes, a road, and a ditch (tributary). Yet EPA called the lot a regulated wetland, enforced CWA Section 404, and stopped the development in 2007. Many years of litigation ensued over the proper test under Section 404.

Whether waters are wetlands has long been determined by physical science elements: water, vegetation, and soil. But whether wetlands are federally regulated is a question of law.

On May 25, 2023, the majority in Sackett v. EPA held that Justice Scalia was correct in Rapanos. That is, Justice Alito, writing for the majority, determined that the term “waters” under the CWA includes only relatively permanent, standing, or continuously flowing bodies of water, such as streams, oceans, rivers, and lakes. Moreover, the Court held that the CWA covers wetlands adjacent to those waters if they have a continuous surface water connection to those waters such that there is no clear demarcation between them, notwithstanding temporary dry spells or low tides. In other words, the two bodies must be indistinguishable, and, even if located nearby, wetlands cannot be considered a part of traditional navigable waters unless there is that continuous surface connection. Barriers such as levees would break that connection. (However, rainwater inundation does not appear to be enough to establish adjacency between wetlands and other waters.)

The holding requires a two-part determination for asserting jurisdiction over adjacent wetlands. First, the adjacent body of water must constitute “waters of the United States.” Second, the wetland must have “a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.”

The majority used legislative and legal history to reach its result. It relied on Congress’ traditional authority over the “channels of interstate commerce.” The Court only used the channels of commerce test (e.g., beds of the navigable rivers) and not the local activity with substantial interstate effects test under the commerce clause to reach its results. This narrow approach may have been done to avoid the vagueness of other agency interpretations that would confuse landowners.

Justice Thomas, joined by Justice Gorsuch, in his concurring opinion explained that he was disappointed by the agency’s refusal to properly interpret the decision in Solid Waste Agency of N. Cook Cty. v. Army Corps of Eng’rs, 531 US 159 (2001), which narrowed federal jurisdiction under the CWA. Justice Thomas’ concurring opinion also emphasized commerce clause precedent and further cast doubt on the expansive federal regulations over occasional floodplains, ditches, and most tributaries.

In his concurring opinion, joined by Justices Sotomayor, Kagan, and Jackson, Justice Kavanaugh disagreed that the wetlands had to have a constant surface water connection to another water to be regulated, as that phrase is not in the CWA. Justice Kavanaugh believed that “adjacent” is closer to “neighboring” than to “touching.”

This decision reduces federal but not state jurisdiction over wetlands under the CWA.

Aside from the potential regulatory impact of the decision, it may encourage more states to assume state law jurisdiction over “nonadjacent” wetlands. Currently, there are three such states: New Jersey, Michigan, and Florida. For example, Florida’s Section 404 rules assume waters separated by 300 feet from a navigable waterway to be regulated wetlands — a fairly clear line. Permittees often prefer to go through state agencies. We will have to observe how the federal agencies react to the case.