Often in the news this year, the EPA’s latest version of the “Waters of the United States” rule was scheduled to become effective on August 28, 2015. The EPA first released the new version for public comment in April of 2014. The new version replaced the previous rule issued in 1986, and was necessary because the unfavorable decisions in United States v. Riverside Bayview Homes, Solid Waste Agency of Northern Cook County v. USACE, and Rapanos v. United States.
A rule to define the meaning of “waters of the United States” is needed because the federal Clean Water Act applies only to those waters. If a river, creek or stream, for example, is not a water of the United States, the EPA lacks statutory authority to regulate it and regulation is left to the states. The new rule represents the latest attempt by the EPA (as with other federal agencies) to expand their statutory authority not by way of legislation, but through the rule-making process. The EPA’s rules in this area have not always received a warm reception from the federal courts, and this latest version of the rule is no exception.
On August 10, 2015, 13 states[i] including Nebraska, filed a motion for preliminary injunction to enjoin implementation of the Clean Water Rule: Definition of “Waters of the United States”[ii] (the “WOTUS Rule”) jointly promulgated by the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers (together the “Agencies”).[iii] In North Dakota v U.S. EPA, United States District Court Chief District Judge Erickson, for the District of North Dakota, granted an injunction, enjoining the Rule on August 27, 2015, the day before the rule became effective. The ruling turned on the preliminary question of whether the District Court or the Court of Appeals should have jurisdiction of the matter, and then whether there were grounds for a preliminary injunction based on the limited record presented to the court. Below is a summary of the court’s findings.[iv]
Jurisdiction
The Clean Water Act (“CWA”) grants exclusive jurisdiction to the federal appellate courts in certain cases involving rule making by the EPA, namely rules involving “effluent limitations” and rules amounting to “the functional equivalent of issuing or denying a permit”.[v] Chief District Judge Erickson found this was not one of those cases, and therefore, the District Court and not the Court of Appeals had original jurisdiction over the matter. The court concluded the WOTUS Rule purpose is to redefine a term and that the relationship between permit issuance/denial and a rule redefining Waters of the United States is tangential at best.[vi] Therefore, the issue is properly before the District Court.
Preliminary Injunction Motion
Proceeding with the merits of the motion, the court applied what is commonly referred to as, the Dataphase factors in determining whether the preliminary injunction was necessary. In this analysis the court evaluates, “(1) threat of irreparable harm to the movant; (2) the balance of harms; (3) the movant’s likelihood of success on the merits; and (4) the public interest.”[vii]
“Likelihood of Success on the Merits”
The court began its analysis with the likelihood of success on the merits factor because if the movant were to fail on this point the motion would fail in its entirety.[viii] The presumption is to apply the “substantial likelihood of success” standard to determine the success on the merits factor; unless the movant can show the rule did not arise out of a reasoned democratic process. If the rule is not a product of a reasoned democratic process, the court need only apply the “fair chance” of success on the merits standard.
To decide if a rule is the product of reasoned democratic process, the court reviews the administrative record. As is the case with some motions for preliminary injunctions, no discovery had taken place before the motion the hearing and decision, so no administrative record was available. Without an administrative record, the court’s only option was to rely on two internal EPA memoranda that illustrated the EPA’s pre-decisional, deliberative process. Traditionally courts do not rely on these type of documents, but it may when it is “the only way there can be effective judicial review”.[ix] The two documents revealed “a process that is inexplicable, arbitrary, and devoid of a reasoned process”. [x] Therefore, the court applied the fair chance standard in analyzing if the movants were likely to succeed on the merits of their claim.[xi] However, the court paused to conclude that the outcome in this case would have been the same, regardless of the standard it applied.[xii]
The court found the Plaintiffs have a fair chance of success of showing that the Agencies violated their Congressional grant of authority because the new WOTUS Rule gives jurisdiction over waters already determined by the Supreme Court in Raponos to exceed the Agencies regulatory authority.[xiii] In Rapanos, the Supreme Court held that waters must have a significant nexus to traditional navigable waters. Non-navigable waters in question must “in fact affect the chemical, physical, and biological integrity of those waters.”[xiv] Because of this, the rule left too much room for the “regulation of drains, ditches and streams remote from any navigable-in-fact waters” exceeding the CWA grant of authority.[xv]
Like the previous rule, the new WOTUS Rule purports to regulate small bodies of water, remote from any navigable in-fact waters. Additionally, the new WOTUS Rule’s definition of a “tributary” suggests inclusion of too many waters, provoking an unreasonable understanding of the term the “nexus”.[xvi] Chief District Judge Erickson cautioned these were the precise concerns of Justice Kennedy when striking down the previous rule in Rapanos.
Chief Judge Erickson also held that the Plaintiffs would likely succeed on the merits of their claim that the Agencies did not properly promulgate the new WOTUS Rule. Holding, the WOTUS Rule is arbitrary and capricious because, “the Agencies have failed to establish a ‘rational connection between the facts found and the Rule as it will be promulgated’”.[xvii] For example, the court observed, the use of 4,000 feet from the high water mark of navigable waters in determining if wetlands or tributaries have a significant nexus to WOTUS as a bright line rule lacks any scientific basis.
Additionally, the Rule is not a logical outgrowth of the proposed rule because the rule materially changed when the Agencies replaced “ecological and hydrological concepts with geographic distances”.[xviii] The United States Code requires agencies promulgating rules to publish the “terms or the substance of the proposed rule” so interested and affected parties may comment.[xix] Prior to its final publication, the Rule utilized ecological and hydrological factors as basis for making a nexus determination. The comments provided the public addressed these standards. The replacement of these standards in the final rule denied the public the right to comment on the standards that the Agencies will use to make jurisdictional determinations. For these reasons, the court concluded the movants had a fair chance of proving they would be successful on the merits of this claim.
Concluding that the Plaintiffs were likely to succeed on the grounds of the other two claims, the court found it unnecessary to evaluate the Plaintiffs’ assertion the Agencies failed to complete an environmental impact statement violating NEPA.[xx]
“Irreparable Harm”
The Plaintiffs claimed irreparable harm based on the loss of sovereignty over waters within their borders, and unrecoverable monetary harm. Both sides agreed the new Rule will result in a decrease of state sovereign waters and an increase of waters controlled by the Agencies, though they disputed the amount.[xxi] The States claimed numerous monetary losses including the cost for more jurisdictional studies and expanding “permitting, oversight, technical and legal analysis” for projects affecting waters previously not subject to federal standards. The court agreed with the Plaintiffs, finding these economic losses to be unavoidable and unrecoverable.[xxii]
“Balance of Harms and Effect on Public Interest”
The court then balanced the harms involved in ruling for one side or the other.[xxiii] Finding the harm to the Agencies was not appreciable when compared to the loss of state sovereignty and unrecoverable monetary losses to the States.[xxiv] The final step in the court’s analysis, which was carefully considered, is whether the public would benefit from the injunction.[xxv] The court considered the certainty and clarity afforded to very small and concrete segment of the public in implementing the WOTUS Rule, but found that benefit did not outweigh the benefit to the greater public in protecting it from federal agency overreach, beyond any express delegation of authority from Congress.[xxvi]
Conclusion
The court concluded the States met their burden of showing the Dataphase factors weighed in favor of granting the injunction and issued the order, enjoining Fed. Reg. 37, 054-127 in the 13 States immediately. On September 5, 2015, Chief District Judge Erickson issued an order limiting the scope of the injunction to only the 13 States who filed the injunction.[xxvii] Two other District Courts dismissed preliminary injunctions on the issue at hand due to lack of jurisdiction, holding the CWA gives the Court of Appeals exclusive jurisdiction on the matter.[xxviii] Additionally, Congressional representatives introduced two separate bills in the Senate and the House of Representatives to the respective environmental committees that would require the Agencies to redraft the new Rule.[xxix] It would appear there are only stormy seas ahead for the EPA’s new Clean Waters Rule.
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Article by: Amanda Lyon
Photo by: Federico Bottos
Citations
[i] The 13 States include Nebraska, North Dakota, Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, New Mexico, Nevada, South Dakota, and Wyoming.
[ii] Clean Water Rule: Definition of “Waters of the United States” 80 Fed. Reg. 124, 37054 (June 29, 2015) (to be codifed at 33 C.F.R. Part 328) available at: http://www2.epa.gov/sites/production/files/2015-06/documents/epa-hq-ow-2011-0880-20862.pdf.
[iii] States Mem. in Supp. of Mot. for Prelim. Inj. (Aug. 10, 2015) available at: http://www.ag.nd.gov/NewsReleases/2015/Memorandum.pdf.
[iv] North Dakota v. U.S. EPA, Civ. No. 3:15-cv-59 (D.N.D.2015) (order granting preliminary injunction). available at: https://www.ag.nd.gov/NewsReleases/2015/PI%20Order.pdf.
[v] Id at 3, 5.
[vi] Id at 5.
[vii] Id at 6 (citing Dataphase Systems, Inc. v. C.L. Systems, Inc., 640 F.2d 109, 112-13 (8th Cir. 1982).
[viii] Id at 6.
[ix] Voyageurs Nat. Park Ass’n v. Norton, 381 F.3d 759, 766 (8th Cir. 2004).
[x] Id at 7.
[xi] Id at 7.
[xii] Id at 9.
[xiii] Id at 10 (citing Raponos v. United States, 547 U.S. 715, 779 (2006)(Kennedy , J., concurring).
[xiv] Id.
[xv] Id.
[xvi] Id at 11 (citing Raponos v. United States, 547 U.S. at 781).
[xvii] Id at 13 (citing Burlington Truck Lines, 371 U.S. 156, 168 (1962).
[xviii] Id at 15.
[xix] 5 U.S.C. §553 (c).
[xx] Id.
[xxi] Id at 16.
[xxii] Id at 17.
[xxiii] Id.
[xxiv] Id.
[xxv] Id.
[xxvi] Id at 18.
[xxvii] North Dakota v. U.S. EPA, Civ. No. 3:15-cv-59 (D.N.D.2015) (order limiting the scope of the preliminary injunction to the Plaintiffs) available at: https://www.ag.nd.gov/NewsReleases/2015/WOTUSOrder9-4-15.pdf.
[xxviii] Murray Energy Corp. v. US. EPA, N0. 1:15-cv-00110 (D.W.Va.); State of Georgia v. McCarthy, No. 2:15-cv-00079 (S.D.Ga.) available at: http://www.cadc.uscourts.gov/internet/opinions.nsf/61AA9C6759829C8B85257E5F005110D8/$file/14-1112.pdf
[xxix] S. J. Res. 234, 114th Cong. (2015); H.R. 594, 114th Cong. (2015).
