Biden Administration Rolls Out 'Durable' WOTUS Definition in Final Rule

The Biden administration has rolled out in a final what it says is a “durable” definition of “waters of the U.S.” (WOTUS), potentially capping a legal and political battle that has raged for nearly two decades.

The final rule issued by the U.S. Environmental Protection Agency (EPA) and the U.S. Department of the Army on Dec. 30 returns to a framework founded on a pre-2015 Bush-era definition with updates to reflect existing Supreme Court decisions. “It establishes limits that appropriately draw the boundary of waters subject to federal protection,” the EPA said Friday. 

EPA: Rule Provides ‘Reasonable’ Approach to Address Regional Differences

As interpreted by the final rule, the term WOTUS includes “those waters that Congress fundamentally sought to protect in the Clean Water Act [CWA]—traditional navigable waters, the territorial seas, interstate waters, as well as upstream water resources that significantly affect those waters,” the EPA said. 

“Traditional navigable waters” includes certain large rivers and lakes, territorial seas, and interstate waters. But for upstream waters that may significantly affect the integrity of downstream waters “that Congress intended to protect” under the CWA the rule “provides a reasonable approach that recognizes regional and geographic differences,” the agency said. “The rule accounts for regional differences in waters because regionally tailored implementation tools, as well as local and regional conditions, help determine whether waters are covered under this rule,” it said.

Reintroducing the Significant Nexus Standard

The final rule, however, also describes standards for determining jurisdiction for tributaries, adjacent wetlands, and additional waters. “Certain types of waters are jurisdictional under the final rule if they meet either the ‘relatively permanent standard’ or ‘significant nexus standard’,” the EPA explained.

“Relatively Permanent is a test that provides important efficiencies and clarity for regulators and the public by readily identifying a subset of waters that will virtually always significantly affect paragraph (a)(1) waters”—waters currently or historically used for commerce, the EPA said. “To meet the relatively permanent standard, the waterbodies must be relatively permanent, standing, or continuously flowing waters connected to paragraph (a)(1) waters or waters with a continuous surface connection to such relatively permanent waters or to paragraph (a)(1) waters.”

The Significant Nexus test, meanwhile, clarifies if certain waterbodies—tributaries and wetlands—are subject to the CWA based on their “connection to and effect on larger downstream waters that Congress fundamentally sought to protect,” the agency added. “A significant nexus exists if the waterbody (alone or in combination) significantly affects the chemical, physical, or biological integrity of traditional navigable waters, the territorial seas, or interstate waters.”

As significantly, the final rule codifies eight exclusions from the definition of WOTUS. These include ditches—including roadside ditches. Ditches, however, must be “excavated wholly in and draining only dry land, and do not carry a relatively permanent flow of water.” The exclusions also include waste treatment systems, “including treatment ponds or lagoons that are designed to meet the requirements of the Clean Water Act.”

As POWER has previously reported, experts anticipated the biggest impact on the industry would be a return to the Significant Nexus test established in the pre-2015 Bush era, but which the Trump-era rule scuttled. Experts also pointed to potential rulemaking impacts related to the Section 404 permit program, which regulates the discharge of dredged or fill material into waters of the U.S., including wetlands.

A pending decision by the U.S. Supreme Court in Sackett v. EPA also poses uncertainty about whether the EPA’s definition will endure. The high court is set to decide whether the U.S. Court of Appeals for the 9th Circuit set forth the proper test for determining whether wetlands are “waters of the United States.” The court heard arguments in the case in October 2022. In a letter to the court on Dec. 30, Acting Solicitor General Brian Fletcher notified the court that the EPA had promulgated a final rule that provides guidance about which adjacent wetlands qualify as WOTUS under the CWA.

A ‘Durable’ WOTUS Definition?

The final rule marks a clear reversal toward a broader definition of what constitutes “WOTUS.” While WOTUS is not defined in the CWA, the EPA and the Army have widely used the term in regulations since the 1970s. The term also figures prominently in the agencies’ jointly implemented programmatic activities. Over the years, WOTUS has effectively emerged as a threshold term that establishes a geographic scope of federal jurisdiction under the CWA.

However, the term has been contentious and has drawn protracted legal battles. The federal rule’s promulgation has its roots in two major U.S. Supreme Court cases: Solid Waste Agency of Northern Cook County v. U.S. et al. (2001), and Rapanos et ux., et al. v. U.S. (2006).  While Rapanos was an especially fractured decision, Justice Kennedy’s formulation of a “significant nexus” test for determining jurisdiction was integrated into legal guidance published by the EPA in 2007 and revised in 2008, during the Bush administration.

In 2015, the Obama administration issued a final rule, known as the “Clean Water Rule,” based largely on Justice Kennedy’s concurring opinion that granted the federal government broader powers to limit pollution. The Obama-era rule, however, became a sticking point for the electric power industry, which expressed concerns that water near power plants, such as water drainage ditches and cooling ponds, may be considered U.S. waters. According to the Nuclear Energy Institute, the rule would create “significant practical problems” for companies operating nuclear power plants and planning new facilities. Similarly, the American Public Power Association suggested the final rule is problematic because it would drastically expand the WOTUS jurisdiction of EPA and the Corps, “which would subject more utility projects and activities to Clean Water Act jurisdiction.”

The power industry widely applauded the Trump administration’s promulgation of the final “Navigable Waters Protection Rule” (NWPA) in 2020, mainly because it narrowed WOTUS’s definition to exempt groundwater and ditches from regulation under the CWA. The 2020 NWPA rule, however, was vacated in August 2021 by the U.S. District Court for the District of Arizona and in September 2021 by the U.S. District Court for the District of New Mexico.

But even before these federal district court decisions, the Biden administration was working to scuttle the NWPA. It announced its intent to revise the definition of WOTUS in June 2021, citing “destructive impacts” to critical water bodies under the Trump-era rule. It issued a proposed rule in November 2021 and rolled out its final rule on Dec. 30.

The EPA and Army Corps on Friday said the rule takes into consideration “best available science and extensive public comment to establish a definition of “waters of the United States” that supports public health, environmental protection, agricultural activity, and economic growth.” The agencies said a key priority was to establish a “durable” definition of WOTUS “to reduce uncertainty from changing regulatory definitions, protect people’s health, and support economic opportunity.”

Assistant Secretary of the Army for Civil Works Michael L. Connor said the rule’s “clear and supportable” definition of WOTUS would allow for “more efficient and effective implementation and provide the clarity long desired by farmers, industry, environmental organizations, and other stakeholders.”

On Friday, the agencies also moved to improve federal coordination in the ongoing implementation of WOTUS. A first step entails issuing a joint coordination memo “to ensure the accuracy and consistency of jurisdictional determinations under this final rule.” The agencies in addition issued a a memo with U.S. Department of Agriculture to provide clarity on the agencies’ programs under the Clean Water Act and Food Security Act.

A Reversal With Implications

According to Duke McCall, a partner at law firm Morgan Lewis, the rule’s impact on industry remains murky. “I don’t know that we’re getting closer to having clarity on the issue than we were 10 years ago,” he said.

McCall flagged several issues. “The first is that the rule does appear to chart a middle path between the Obama-era and the Trump-era regulations, using as its foundation the 1986 Bush-era regulations, and then layering on top of that, the [Supreme Court’s] decisions,” he said. These include Justice Scalia’s relatively permanent surface connection test and Justice Kennedy’s significant nexus test from the 2006 Rapanos decision.

“In addition to that, I think there are some additional clues provided by the agency. For example, whereas the Obama regulation had allowed for . . . adjacent wetlands as those potentially including all wetlands in the 100-year floodplain [of and] within 4,000 feet of jurisdictional waters, the preamble to the new rule clarifies that[adjacent wetlands] typically would be only those wetlands within a few 100 feet of traditional navigable waters,” he said. “So the clear signal from the agency for this rule is that it is narrower in scope than the Obama-era regulations. But it’s also broader in scope than the Trump-era regulation, which eliminated the significant nexus component altogether.”

However, the final rule’s return to the “more amorphous” significant nexus text still poses a “potentially troubling” issue, McCall said. While the EPA and Army Corps “tried to provide some guidance and clues as to how they would apply it, we’re back in this in this area where if it’s not a relatively permanent surface connection, then you have to apply this [significant nexus] test,” he said. “Quite frankly, there’s not a clear, defined path to determine exactly what that means,” he added. “The agency has proposed significant regional-based workshops to help provide guidance, but we’ve lost the bright lines that were both in the Trump-era regulations and the Obama-era regulations.”

How the Supreme Court responds in Sackett v. EPA, an ongoing case, could also reshape the rule. “It depends on how [the court approaches] the issue. Do they limit the analysis to whether [the] Sackett wetlands are ‘adjacent’ [to a traditional navigable water], or do they—as a conservative majority—use this as an opportunity to adopt the Scalia test, the relatively permanent surface connection test from Rapanos, and assert that applies exclusively,” McCall said.

“If that were the case, that would have a much broader impact on this rule and might require the agency to go back to the drawing board [because under the proposed rule] the relatively permanent or significant nexus analysis applies not only to adjacent wetlands, it applies to tributaries, applies to ponds, lakes, streams, [and] other water bodies. That is the foundation for this current rule, so if they were to reject outright [Justice} Kennedy’s significant nexus test as being appropriate, then that would have a much, much broader impact.”

McCall suggested industry should use the 1986 regulations as a “yardstick.” “I think that is intended to be what the current rules would achieve as well, in all likelihood, but we’re unfortunately likely to see years of additional litigation over the validity of the current rule,” he said.

—Sonal Patel is a POWER senior associate editor (@sonalcpatel, @POWERmagazine).

Update (Jan. 5): Adds legal commentary from Duke McCall, a partner at law firm Morgan Lewis.