SCOTUS Wetlands Ruling Significantly Reduces Federal Jurisdiction Under Clean Water Act

May 26, 2023

In a landmark decision in Sackett v. Environmental Protection Agency, the U.S. Supreme Court adopted a more stringent test for determining whether wetlands are “waters of the United States,” severely curtailing the scope of federal jurisdiction under the Clean Water Act.

Under the Clean Water Act (CWA), the U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers have authority over “navigable waters,” which the CWA defines as “waters of the United States.” In the May 25, 2023, ruling, the Supreme Court held “that the CWA extends to only those wet­lands that are as a practical matter indistinguishable from waters of the United States.”

Federal agencies asserting CWA jurisdiction over wetlands must now satisfy a two-pronged test:

  • “[F]irst, that the adjacent [body of water constitutes] … ‘water[s] of the United States,’ (i.e., a relatively permanent body of water connected to traditional interstate navigable waters).”
  • “[S]econd, that the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.”

Importantly, the “significant nexus” test from former Justice Anthony Kennedy’s opinion in Rapanos v. United States is dead — all nine justices declined to adopt the significant nexus test and all agreed that the property at issue in Sackett is not covered by the Clean Water Act. From a practical perspective, this decision puts the EPA and the Army Corps of Engineers back 17 years to the pre-Rapanos days, which could halt ongoing enforcement actions and spur another round of guidance and rulemaking as EPA and the Corps sort through the impact of this decision. It is also likely to stall, or at least significantly delay, permit issuance for projects that are currently in the Corps’ queue.

This decision ends a nearly two-decade argument between the federal government and an Idaho couple, Michael and Chantell Sackett, over whether the CWA applies to the Sacketts’ property. The Sacketts’ legal battle began in 2007, shortly after they began backfilling their property to prepare the lot, which is about 300 feet from Priest Lake, for construction. The Sacketts received a notice from the EPA to stop work because their lot contains wetlands the EPA classified as “waters of the United States.” That meant any backfilling on the property constituted an illegal discharge of pollutants into “navigable waters,” thus preventing development of the property and subjecting the Sacketts to severe criminal or civil penalties. The EPA reasoned that the wetlands on the Sacketts’ lot fed into a non-navigable creek (despite being separated by a 30-foot road) that then led to Priest Lake, which is a navigable intrastate water. 

Agreeing that the Sacketts’ lot contains “waters of the United States,” the District Court and U.S. Court of Appeals for the Ninth Circuit applied the “significant nexus” test outlined by Justice Kennedy in his concurring opinion in Rapanos: whether there is a “significant nexus” between the wetlands and waters that are covered by the CWA, and whether the wetlands “significantly affect” the quality of those waters.

The May 25 decision discards the “significant nexus” test in favor of the more stringent test formulated by the plurality in Rapanos. The Supreme Court reasoned that, under the EPA’s rule, it would be difficult, if not impossible, for many landowners to determine whether the CWA would apply to their property — an especially undesirable result when those landowners could face “severe criminal sanctions for even negligent violations” of the law.

EPA and the Corps, which are tasked with implementing the Clean Water Act’s waters of the United States (WOTUS) provisions, face a tough road ahead. They had just released a final rule in December 2022 that articulated their definition of WOTUS, and that rule had already been blocked in more than half the states by courts that have ruled opponents are likely to succeed in their challenges to it. The Supreme Court’s opinion in Sackett essentially confirms those rulings in many respects.

Please contact an alert author for advice on immediate impacts on pending 404 wetlands permits and forward-facing considerations.