Supreme Court Limits Federal Authority Over Wetlands Under Clean Water Act

The U.S. Supreme Court issued its long-anticipated decision in Sackett v. EPA on May 25, 2023, holding that the jurisdiction of the Clean Water Act extends only over wetlands that have a “continuous surface connection” with a traditional navigable water body of the United States. The decision provides some clarity regarding what are “waters of the United States” because it removes the multifactor test that had complicated jurisdictional issues.

• The five-justice majority held, with Justice Samuel Alito writing, that a wetland must be “indistinguishable” from “relatively permanent, standing or continuously flowing bodies of water” such as streams, oceans, rivers, or lakes that are ordinarily considered navigable waters of the United States.
• The Court’s decision may limit environmental enforcement in the future, with at least some wetlands previously regulated by federal agencies no longer falling under the Clean Water Act’s jurisdiction.
• While Sackett dealt with wetlands alone, lower courts could extend the Court’s broad reasoning based on the clear-statement rule to the other margins of Clean Water Act jurisdiction — such as non-navigable tributaries.
• The Environmental Protection Agency (EPA) and the Army Corps of Engineers had published new regulations (that are being challenged in several courts). Sackett did not directly address those rules but undermined their rationale.
• While Sackett limits federal jurisdiction, it has no effect on state jurisdiction.

Backdrop of Clean Water Act Litigation. Sackett is the latest development in a decades-long series of disputes over the proper test for determining “waters of the United States.” Passed in 1972, the Clean Water Act was a landmark environmental legislation designed to address water pollution resulting from industrial activity. The act prohibits “the discharge of any pollutant” into “navigable waters.” Since the act’s passage, the two agencies jointly tasked with its implementation — the EPA and the U.S. Army Corps of Engineers — have interpreted the term “navigable waters” to include “[a]ll ... waters” that “could affect interstate or foreign commerce” as well as “[w]etlands adjacent” to those waters. Disputes, however, quickly arose over the geographic reach of “adjacent” waters.

This is not the first case to go the Supreme Court on this issue. The Supreme Court has opined on the issue in three prior cases but ultimately failed to reach a conclusive consensus each time. This confusion has permeated the lower courts faced with jurisdictional waterways issues. Until Sackett, the controlling test adopted by the EPA and the Corps was Justice Anthony Kennedy’s concurrence in Rapanos v. United States, which established a multifactor, “significant nexus” test. This test asks whether the wetland in question has a “significant nexus” with a navigable water body. Given the breadth of this language, the agencies’ interpretation of “waters of the United States” fluctuated among administrations. The most recent 2023 rule under the Biden administration broadens the definition of “waters of the United States” by directing field agents to consider a list of open-ended factors for satisfying the “significant nexus” test. (Find Sidley’s coverage of that rule and associated litigation here.) This left property owners unable to predict whether a parcel of land would fall under the Clean Water Act’s scope.

The Sacketts’ Parcel in Idaho. In Sackett, a couple purchased a small plot of land and, in preparation for building a family home, backfilled the site with dirt and rocks. Several months later, the EPA sent them a compliance order that their backfilling violated the Clean Water Act because their property contained protected wetlands. The agency based the citation on its view that the property was “adjacent to” a tributary on the other side of a 30-foot road, which fed into a non-navigable creek, which, in turn, connected to Priest Lake. Failure to comply with the EPA’s order would result in severe criminal penalties for the Sacketts, including a $40,000 per-day fee. In response, the Sacketts sued under the Administrative Procedure Act, alleging the EPA lacked jurisdiction because any wetlands on their property were not “waters of the United States.” The district court initially dismissed the Sackett’s claim, but the Supreme Court reversed dismissal on appeal in 2012.

Following additional proceedings on remand, the district court entered summary judgment for EPA, holding that the Clean Water Act satisfied the “significant nexus” standard as described in the Rapanos decision and subsequent agency guidance. The Ninth Circuit affirmed, and the Supreme Court reversed. All justices concurred in the judgment, but only five justices joined the majority opinion.

The “Continuous Surface Connection” Test. Writing for the majority, Justice Alito held that the Clean Water Act extends only to wetlands with a “continuous surface connection to bodies that are ‘waters of the United States’ in their own right,” so that they are “indistinguishable” from those waters. In reaching its conclusion, the Court rejected the EPA’s argument that “waters” is “naturally read to encompass wetlands,” arguing that the presence of water alone is insufficient; for example, according to the Court, puddles have water but are not “waters.” Instead, the ordinary meaning of the word “adjacent” necessitates that a wetland be “contiguous” with a traditional navigable body of water.

Sackett replaces the “significant nexus” test with the more concrete “continuous surface connection” test, thus both restricting and clarifying the jurisdictional scope of the Clean Water Act. While the ruling is primarily limited to wetlands, the Court’s broad reasoning that pulls from the clear-statement rule could potentially be the foundation for future litigation that further restricts the Clean Water Act’s jurisdiction. For example, litigants may cite Sackett to limit federal authority over non-navigable tributaries; they may also challenge the Biden administration’s 2023 rule under this decision. Thus, stakeholders should bear in mind that Sackett, while it brings clarity to one aspect of the “waters of the United States” saga, will still have broad-reaching immediate as well as downstream effects in environmental enforcement.

In support of its conclusion, the Court cited the clear-statement rule, which disallows interpreting statutory language in a way that would have dramatic consequences unless the statute’s language is unmistakably clear. In the context of the Clean Water Act, interpreting “adjacent” to cover wetlands that were near to but not contiguous with covered waters would expand the statute’s jurisdictional reach over vast areas of land across the United States. The Court rejected such a consequential interpretation based on ambiguous text. The Court also emphasized the need for clear guidance in light of the harsh criminal penalties of the Clean Water Act. The Court also noted federalism concerns, as regulation of water pollution historically fell under state authority.

The Three Concurrences. Three Justices authored concurring opinions, with two concurrences in the judgment only. Justice Clarence Thomas agreed with the majority, writing separately (and joined by Justice Neil Gorsuch) to suggest that further restriction of Clean Water Act jurisdiction could be warranted based on the Commerce Clause terms “navigable” and “of the United States” in addition to “waters.” Justices Elena Kagan and Brett Kavanaugh concurred in the judgment only (joined by Justices Sonia Sotomayor and Ketanji Jackson), rejecting the majority’s “continuous surface connection” test in its entirety. According to those two concurrences, the majority’s narrowing of “adjacent” to mean “adjoining” departed from statutory text and purpose, continuous agency practice, and Supreme Court precedent. Notably, Justice Kagan’s concurrence drew a through line with West Virginia v. EPA, a Clean Air Act case decided last year, suggesting that the Court was applying “get-out-of-text-free cards” to Congress’s environmental enactments.