Clean Water Rule Challenges Belong in District Courts in National Association of Manufacturers v Department of Defense

In National Association of Manufacturers v Department of Defense, the U.S. Supreme Court clarified that legal challenges involving the Waters of the United States Rule (often referred to as the “Clean Water Rule”) must be filed in the federal district courts. The Court’s decision will impact litigation challenging the Obama-era Clean Water Rule, as well as the Trump’s Administration’s ongoing effort to rescind and rewrite the rule.

Jurisdiction Over EPA Challenges

There are two principal avenues of judicial review of an action by the EPA. Generally, parties may file challenges to final EPA actions in federal district courts, ordinarily under the Administrative Procedure Act (APA). However, the Clean Water Act (33 U.S.C. §1369(b)(1)) enumerates seven categories of EPA actions for which review lies directly and exclusively in the federal courts of appeals:

(A) in promulgating any standard of performance un­der section 1316 of this title, (B) in making any de­ termination pursuant to section 1316(b)(1)(C) of this title, (C) in promulgating any effluent standard, prohibition, or pretreatment standard under section 1317 of this title, (D) in making any determination as to a State permit program submitted under section 1342(b) of this title, (E) in approving or promulgating any effluent limitation or other limitation under sec­tion 1311, 1312, 1316, or 1345 of this title, (F) in issuing or denying any permit under section 1342 of this title, and (G) in promulgating any individual control strategy under section 1314(l) of this title.”

WOTUS Rule

The Clean Water Act (Act) generally prohibits “the discharge of any pollutant by any person,” except in express circumstances. A “discharge of a pollutant” includes “any addition of any pollutant to navigable waters from any point source,” and the statutory term “navigable waters,” in turn, means “the waters of the United States.”

Section §1311(a) contains important exceptions to the general prohibition on discharge of pollutants, including two permitting schemes that authorize certain entities to discharge pollutants into navigable waters: the National Pollutant Discharge Elimination System (NPDES) program administered by the Environmental Protection Agency (EPA) under §1342, and a program administered by the Army Corps of Engineers (Corps) under §1344.

The statutory term “waters of the United States” delineates the geographic reach of those permitting programs as well as other substantive provisions of the Act. In 2015, the EPA and the Corps proffered a definition of that term through an agency regulation dubbed the Waters of the United States Rule (WOTUS Rule or Rule). The WOTUS Rule “imposes no enforceable duty on any state, local, or tribal governments, or the private sector.” As stated in its preamble, the Rule “does not establish any regulatory requirements” and is instead “a definitional rule that clarifies the scope of” the statutory term “waters of the United States.”

Several parties, including the National Association of Manufacturers (NAM), challenged the Rule in United States District Courts across the country. Many parties, but not NAM, filed “protective” petitions for review in various Courts of Appeals to preserve their challenges should their District Court lawsuits be dismissed for lack of jurisdiction under §1369(b). The circuit-court actions were consolidated and transferred to the Court of Appeals for the Sixth Circuit. Meanwhile, the parallel actions in the District Courts continued. NAM intervened as a respondent in the Sixth Circuit and, along with several other parties, moved to dismiss for lack of jurisdiction. The Government opposed those motions, arguing that the challenges must be brought first in the Court of Appeals because the WOTUS Rule fell within subparagraphs (E) and (F) of §1369(b)(1). The Sixth Circuit denied the motions to dismiss.

The Supreme Court’s Decision in National Association of Manufacturers v Department of Defense

The Court unanimously reversed the Sixth Circuit’s decision. “Congress has made clear that rules like the WOTUS Rule must be reviewed first in federal district courts,” Justice Sonia Sotomayor wrote on behalf of the Court.

The Court concluded that the WOTUS Rule falls outside the ambit of Section 1369(b)(1) of the Clean Water Act. With regard to subparagraph (E), the Court noted that the WOTUS Rule is not an “effluent limitation.” Rather, it “announces a regulatory definition for a statutory term.” The Court further held that the WOTUS Rule does not fit within subparagraph (E)’s “other limitation” language. As explained by Justice Sotomayor, “Congress’ use of the phrase ‘effluent limitation or other limitation’ suggests that an ‘other limitation’ must be similar in kind to an ‘effluent limitation’: that is, a limitation related to the discharge of pollutants.”

As for Subparagraph (F), the Court concluded that the provision does not cover the WOTUS Rule because it neither issues nor denies NPDES permits issued under §1342. In reaching its decision, the Court rejected the government’s proffered “functional approach,” which maintained that the WOTUS Rule falls under subparagraph (F) because it is “functionally similar” to issuing or denying a permit. According to the Court, the argument was “completely unmoored from the statutory text.” Justice Sotomayor added: “Rather than confront that statutory text, the Government asks us to ignore it altogether.”

The Court also rejected the government’s argument that it is more efficient for cases to be decided by the federal courts of appeal. “Routing WOTUS Rule challenges directly to the courts of appeals may improve judicial efficiency. But efficiency was not Congress’ only consideration,” Sotomayor wrote. “Had Congress wanted to prioritize efficiency, it could have authorized direct circuit-court review of all nationally applicable regulations, as it did under the Clean Air Act.”

Based on finding a lack of jurisdiction, the Court remanded the case back to the Sixth Circuit with instructions to dismiss the petitions for review that have been filed in that court.