On May 25, 2023, the U.S. Supreme Court issued a 9-0 decision ending a nearly 16-year battle over the Clean Water Act’s (CWA) applicability to certain wetlands. In a five-justice majority opinion, the Court found that the CWA applies only to wetlands that are “as a practical matter indistinguishable” from “relatively permanent, standing or continuously flowing bodies of water” which are more traditionally considered navigable waters. The decision rejected the longstanding “significant nexus” test applied by the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (USACE) since 2006 when it was announced by Justice Anthony Kennedy in a concurring opinion in Rapanos v. United States. While it is not clear how many acres of wetlands are no longer subject to CWA applicability, many believe the decision will provide greater clarity to project proponents in determining which wetlands are subject to federal regulation.   

In 2007, Michael and Chantell Sackett (the Sacketts) began backfilling their Idaho property in preparation for building a new home. Their backfilling was interrupted when the Sacketts received a notice from the EPA stating that their property contained wetlands covered by the CWA. The CWA prohibits the discharge of pollutants, including backfilling, into navigable waters, which are considered “waters of the United States” (WOTUS). EPA took the position that the wetlands on the Sacketts’ property were “adjacent to” an unnamed tributary to Priest Lake, an interstate body of water, and therefore subject to the CWA prohibition. The wetlands were on the other side of a 30-foot road from the unnamed tributary. Both the district court and the Ninth Circuit ruled in favor of EPA, applying the “significant nexus” test. 

Ruling in favor of the Sacketts, the Supreme Court majority relied heavily upon the volume of wetlands subject to CWA restrictions, the use of “open-ended” factors in the application of the “significant nexus” test, the CWA’s statement that it intended to preserve the states as the primary regulators of water resources, and the possibility of criminal liability for violating the CWA. A four-justice concurring opinion found the majority’s position too narrow, stating they would preserve CWA applicability for wetlands “adjacent” to traditionally navigable waters, “whether touching or not” if separated only by a barrier, such as a dike or a dune. 

Supporters of the decision believe that it properly checks EPA’s authority under the CWA and curtails government power over property rights. However, environmentalists, including President Biden, fear that by limiting the CWA’s scope and the definition of WOTUS, waterways are now at additional at risk of pollution. The ruling will require the Biden administration to revise its WOTUS rule, which became effective in March of this year, though it had been enjoined in roughly half of the country.

Exactly how EPA and USACE will proceed with respect to adoption of a new WOTUS rule and in permitting regimes that rely upon the WOTUS rule is unclear at this time. The regulated community should continue to keep a close eye on WOTUS developments and anticipate potential delays as EPA and USACE respond to the decision.