THE DRAFT CLEAN WATER ACT JURISDICTIONAL GUIDANCE
And House Bill H.R 2018

The buzz is ongoing about the Draft Guidance on Identifying Water Protected by the Clean Water Act (Draft Guidance) that was placed on a 60-day comment period on May 2, 2011.  The Draft Guidance represents the first significant effort by the Environmental Protection Agency (EPA) and United States Army Corps of Engineers (USACE) to regain a perceived reduction in the limits of Federal jurisdiction under the authority of the Clean Water Act (CWA).  The Draft Guidance is a 39 page document that, in a number of ways, redefines how regulators and consultants may view CWA jurisdiction in the future.  The Draft Guidance introduces new terminology (which has already received many critical comments including some from Congress) without providing strong statutory support, science rationale, or definition.  It should also be noted that there is a noticeable imbalance, beyond that which normally occurs for draft guidance documents, relative to the published/posted articles that are unsupportive of the Draft Guidance versus supportive articles.  The articles are often arguing the legality of the document and its divergence from the guidance provided by Supreme Court decisions.  In an effort to provide an abbreviated critique, we, at Duffield Associates, offer our thoughts on why this document was created and attempt to touch upon the jurisdictional implications and their impact.

WHY NOW? This guidance document appears to have been issued now for a few reasons.

1. The USACE has lost a number of cases at the District Court level in response to the Court’s interpretation of the Rapanos Decision.  The interpretation of what constitutes a “significant nexus” being the pivotal issue. The term “significant nexus” was addressed during the Rapanos Decision by Justice Kennedy as stated below.
   
   In Rapanos, Justice Kennedy concluded that wetlands are “waters of the United States” “if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as ‘navigable.’ When, in contrast, wetlands’ effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term ‘navigable waters.’”
   Both the USACE and EPA have had difficulty sufficiently demonstrating a significant nexus in recent court cases and, as a result, there may be a concern that a judicial precedence is developing.
   
   
2. The process by which project specific nexus determinations are being made is taking too long and costing too much. 
   
   
3. The regulatory agencies appear to be attempting to broaden their Section 404 jurisdictional reach or, at a minimum, regain that which the Supreme Court Decisions determined was being inappropriately regulated.      

• If the Draft Guidance is finalized in its current form, it will empower regulatory field personnel to expand jurisdiction by making it easier to redefine and establish what constitutes a significant nexus.  It should be noted that the Draft Guidance does not strictly follow Justice Kennedy’s view as stated in the Rapanos Decision.  In addition, the guidance will expand the new significant nexus from pertaining strictly to wetlands to also include tributaries and isolated waters.  The Draft Guidance has a reduced dependency on establishing a hydrologic connection.  It will allow the regulator to look at not just the area in question but rather look at the entire watershed in which the project is located in order to make the determination.  How likely is it that an entire watershed will not have some sort of significant nexus on navigable waters?  Contrary to the Supreme Court’s view of the definition of navigable waters, the Draft Guidance will include all waters that ever had a recreational use.  Many roadside ditches and agricultural ditches with a channel will have the potential to be regulated.  Under the draft guidance the status of “interstate waters” will be expanded.  In addition, all “other” waters noted in the Section 404 regulations could be subject to the significant nexus standard as presented in the Draft Guidance. 

• The Draft Guidance is inconsistent with the regulations and Supreme Court decisions.  The current regulations do not address ditches under Section 404 but the guidance hits ditches hard.  The regulations do not define tributaries but the Draft Guidance catches most established conveyances of water.  The “other” waters in the regulations, when jurisdictional, are based on specific connections to interstate commerce.  However, the Draft Guidance relies on the newly created significant nexus standards.  Adjacency in the regulations was strictly related to wetlands but the Draft Guidance provides opportunity for adjacency to capture certain non-wetland waters.  

• The Draft Guidance is viewed by some as an end run around the current law.  They contend that the agencies are attempting to define waters of the United States through informal guidance rather than notice and comment rulemaking in violation of the Administrative Procedure Act (APA), despite the Supreme Court’s encouragement and the EPA’s previous commitments for new rulemaking.  To further confuse the issue, the agencies say that this Draft Guidance is not binding and lacks the force of law even though it seems that they intend to use the Draft Guidance as a legal enforcement mechanism and one which will be used to make legal interpretations. 

• The agencies performed an economic analysis to estimate potential indirect impacts associated with the Draft Guidance.  The WAC reported, based upon the information taken from this analysis, the annual cost for implementing this guidance was reported to be between $78 million and $171 million.   As such, the implementation of the Draft Guidance may place unnecessary financial burdens on the regulated community.

SHORT & LONG-TERM

Short-Term
Now that the 60-day comment period has past, the EPA and the USACE will need to respond to comments (there will likely be many) and then issue the guidance in a final form.  It is unclear how the public comments will affect the Draft Guidance and there is no mandated timeline requiring the agencies to finalize, if ever, the Draft Guidance.  If the guidance is finalized, it will take the USACE Districts time to review and train their regulatory staff.  If implemented in its current or similar form, the USACE will be empowered to determine more areas as being jurisdictional.  What does this mean for the private sector?  If you utilize the Preliminary Jurisdictional Determination (JD) process during your project, which assumes all wetlands and waters delineated are assumed to be jurisdictional, you won’t see a huge change in most cases.  If you utilize the Approved JD process during your project, which requires a jurisdictional determination be made on all delineated wetlands and waters, you may find that you have additional areas subject to Federal jurisdiction and you may want to reconsider the time and expense involved with obtaining an Approved JD relative to what it will gain you. 

Long-Term
This Draft Guidance will empower the agencies to extend their jurisdictional reach.  This Draft Guidance will likely face court challenges.  It does not appear to have the science or statutory/judicial support that typically accompanies a Federal guidance document.  This guidance represents a bold move by the regulatory agencies and it will be interesting to see whether they can implement it.

OTHER RELATED ACTIONS

Recently, House Bill H.R 2018 was passed by Congress and is now in the Senate.  This bill, the Clean Water Cooperative Federalism Act, referred to by some as “The Rein in EPA” Act, was introduced by Rep. John Mica (R-FL) with strong lobbying support.  H.R. 2018 would amend the Clean Water Act in the following ways:

• Restrict EPA’s ability to issue revised or new water quality standards under certain circumstances.
• Prevent unilateral actions by the EPA that second guess decisions of State regulatory agencies.
• Prohibit EPA from superseding a water quality certification granted by a State under the CWA.
• States will not be required to follow Federal guidance that redirects a reinterpretation of the State’s approved water quality standard.
• Significantly limit EPA’s power to overrule State-made water quality decisions, withhold Federal financial support based on disagreements on water quality standards, objections to State-issued NPDES permits, and more.
• Make it easier for States to assume portions of the CWA.
• Reduce the time limit for agencies commenting to the USACE on Section 404 permits to 30 days.