Clean Water Rule Challenges Must Begin in Federal District Courts, Supreme Court Holds

Clean Water Rule Challenges Must Begin in Federal District Courts, Supreme Court Holds

Legal Sidebar

Clean Water Rule Challenges Must Begin in
Federal District Courts, Supreme Court Holds
January 31, 2018
In National Association of Manufacturers (NAM) v. Department of Defense, the Supreme Court held that
legal challenges to the 2015 Clean Water Rule issued by the Environmental Protection Agency (EPA) and
Army Corps of Engineers (Corps) must be litigated in multiple federal district courts rather than in a
consolidated case in the United States Court of Appeals for the Sixth Circuit (Sixth Circuit). Since
October 2015, a Sixth Circuit order had stayed implementation of the Clean Water Rule on a nationwide
basis pending the court’s determination of its jurisdiction over the challenge to the Rule. But the Supreme
Court’s NAM decision, which requires the Sixth Circuit to dismiss its case, will result in the elimination
of that order, and potentially could complicate legal challenges to the Clean Water Rule and the Trump
Administration’s effort to rescind and replace it.
Background on NAM and the Clean Water Rule
Also known as the “Waters of the United States” or WOTUS Rule, the Clean Water Rule attempts to
define which waters and wetlands are subject to regulatory requirements in the Clean Water Act. The
underlying issue addressed in the Clean Water Rule—the breadth of federal regulatory jurisdiction under
the Clean Water Act—has been debated and litigated for more than 40 years (as outlined in this CRS
report), and the Clean Water Rule has been no exception to this trend. After the Corps and EPA announced
the Clean Water Rule in 2015, more than 100 parties filed lawsuits challenging its scope and legal
authority in federal appellate and district courts across the country. Before any court could address the
merits of the claims, however, an impasse arose over what court was the proper forum for the litigation.
Whereas many opponents of the Clean Water Rule argued that their cases should be litigated at the federal
district court level (where challenges to agency actions ordinarily begin), the United States contended that
the cases fell within the scope of § 509 of the Clean Water Act, which lists seven categories of agency
actions that are subject to direct appellate court review. In a split decision issued in December 2015
(discussed here), a panel of the Sixth Circuit adopted the United States’ position and held that § 509 gave
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the federal appellate courts original jurisdiction to hear all challenges to the Clean Water Rule. But, in the
latest turn in the long-winding litigation over the Clean Water Act’s jurisdiction, the Supreme Court
disagreed with the Sixth Circuit and vacated its opinion with instructions to dismiss the case for lack of
jurisdiction. “Congress has made clear that rules like the [Clean Water] Rule must be reviewed first in
federal district court[,]” wrote Justice Sotomayor in an opinion for the unanimous Court.
The Future of the Legal Challenge to the Clean Water Rule After NAM
Although the Supreme Court’s NAM decision does not resolve the merits of the challenges to the Clean
Water Rule, it could have important implications for how the legal process unfolds. In 2015, suits seeking
to invalidate the Rule were proceeding in 13 federal district courts, but those courts stayed or dismissed
their cases when the Sixth Circuit issued its now-vacated decision that it possessed exclusive jurisdiction.
The plaintiffs in the district court cases could seek to revive their suits, leading to simultaneous challenges
to the Clean Water Rule in multiple district courts. (A Judicial Panel on Multidistrict Litigation already
rejected a request to consolidate the district court cases in 2015.) Further, each district court case will
have its own appeals process, creating the potential for later disagreements in the U.S. courts of appeals
on the underlying legality of the Rule.
Regardless of which courts hear challenges to the Clean Water Rule, administrative actions by the Trump
Administration are likely to impact the litigation. In February 2017, the President issued an executive
order directing the Corps and EPA to review and rescind or revise the Clean Water Rule. In a proposed
rule published in July 2017 (analyzed here), the agencies initiated what they described as the first step in a
two-step process to (1) rescind the Clean Water Rule and (2) engage in a separate rulemaking process to
develop a new rule that will define the jurisdictional reach of the Clean Water Act. EPA and the Corps
currently are evaluating over 680,000 comments on the step-one proposal. But once the first step is
complete and the Clean Water Rule is rescinded formally, any pending challenges to the Rule will likely
be dismissed as moot (as discussed in this Sidebar).
Does NAM Allow the Corps and EPA to Start Implementing the Clean Water Rule?
Before the Supreme Court’s NAM decision, the Sixth Circuit had granted a nationwide stay of the Clean
Water Rule, effectively halting its implementation across the United States. Although NAM did not vacate
the Sixth Circuit’s order granting the stay, the NAM Court concluded that the Sixth Circuit lacked subject
matter jurisdiction over its consolidated appellate-level cases, and it instructed the Sixth Circuit to dismiss
those cases in full. Consequently, once the Sixth Circuit enters a dismissal order, its stay of the Clean
Water Rule will no longer be in place.
Even before the Sixth Circuit’s stay, however, the United States District Court for the District of North
Dakota had granted a preliminary injunction blocking operation of the Rule. While that injunction
potentially could become effective again if litigation resumes at the district court level, the District of
North Dakota did not enjoin implementation of the Clean Water Rule on a nationwide basis. As a result,
once litigation resumes in the district courts, the Clean Water Rule could be enjoined in some parts of the
country but allowed to operate in others.
Anticipating complications associated with an expiration of the Sixth Circuit’s nationwide stay, the Corps
and EPA initiated another rulemaking action in November 2017. This proposed rule seeks to add an
“applicability date” to the Clean Water Rule of two years from the date of the final agency action on the
proposal. According to the Corps and EPA, adding an applicability date to the Clean Water Rule would
maintain the status quo and prevent inconsistencies and uncertainties about the regulatory regime that
could arise after the nationwide stay is terminated, but before the agencies have finalized regulations
rescinding the Clean Water Rule. In essence, the November 2017 proposed rule would allow the agencies
more time to undertake the two-step rescind and replace process without allowing the 2015 Clean Water
Rule to take effect during the rulemaking process.

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Congress and the Clean Water Rule
Several legislative proposals introduced in the 115th Congress could impact the future of the Clean Water
Rule. An omnibus appropriations bill that passed in the House would authorize the Corps and EPA to
withdraw the Rule “without regard to any provision of statute or regulation that establishes a requirement
for such withdrawal.” If enacted, this provision could permit the agencies to complete the “step one”
process of rescinding the Clean Water Rule without following the notice and comment rulemaking
requirements of the Administrative Procedure Act (discussed in this Report). Other bills introduced in the
115th Congress would directly repeal the Rule or replace it by amending the Clean Water Act. Some
Members of the House and Senate also have introduced resolutions expressing the sense of their Chamber
that the Clean Water Rule should be withdrawn or vacated.

Author Information

Stephen P. Mulligan

Legislative Attorney

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
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Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
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