2020 Environmental Real Estate Issues

On December 30, 2022, EPA and the US Army Corps of Engineers issued a Final Rule addressing the definition of “waters of the United States” (WOTUS) with the goal of “defining the scope of waters protected” under the Clean Water Act (CWA). On the same day, the US Department of Justice (DOJ) informed the US Supreme Court of the newly issued Rule, referencing Sackett v. EPA, a pending case where the Court is considering “the proper test for determining whether wetlands is ‘waters of the United States’ under” the CWA. (See Alert January 27, 2022 US Supreme Court Accepts another WOTUS Case)

Rule Will Be Effective before Sackett Ruling
The Court heard oral arguments in Sackett on October 3, 2022; I expect the ruling, including dissents and concurrences, no earlier than May 2023. The Rule will become effective in early March 2023, sixty days after formal publication in the Federal Register.

The Rule and Sackett
In Sackett, the lower court determined the wetlands on Sackett’s property are subject to the CWA under the “significant nexus” test.
It appears DOJ is inviting the Court to read the Rule and its preamble, which support DOJ’s position that Sackett’s wetlands are subject to the CWA. The Rule relies heavily on the “significant nexus” test but also includes additional definitions and guidance, in response to complaints that the “significant nexus” test is difficult to apply.

Prediction: Stay of Rule and Implicit Reversal by Court
Prior to issuing its ruling in Sackett, the Court will issue or uphold a stay of the Rule.

When it issues Sackett, the Court will reject the “significant nexus” test and make clear that the Rule, despite its clarifications and accompanying arguments, is contrary to the CWA. In 2006, Justice Scalia wrote an opinion rejecting the “significant nexus” test and categorically stating “waters of the United States…does not include channels through which water flows intermittently or ephemerally…” The 2006 opinion did not have enough support to become precedent; now it does. The three justices that agreed with Scalia in 2006 are still on the Court, as are three justices appointed by President Trump.

To see EPA’s news release regarding the Rule, which includes links to access the text and preamble https://www.epa.gov/newsreleases/epa-and-army-finalize-rule-establishing-definition-wotus-and-restoring-fundamental

Finally, best wishes for the New Year and remember my record in predicting Court outcomes is far from perfect!