On May 25, 2023, the United States Supreme Court held that the term “waters of the United States” (“WOTUS”)—as used in the federal Clean Water Act (“CWA”), 33 U.S.C. § 1362(7)—means “streams, oceans, rivers, and lakes” and wetlands that are so adjacent as to be “indistinguishable” from those waters due to a continuous surface connection.¹ This means that enforcement of the CWA by the United States Environmental Protection Agency (“EPA”) and by private plaintiffs is limited to the waters and wetlands so described—a notable narrowing of the Court’s prior interpretation.

Background

The CWA regulates discharges to “navigable waters,” which the statute defines as “waters of the United States, including the territorial seas.” 33 U.S.C. § 1362(7). The scope of the terms “navigable waters” and “waters of the United States” is relevant under several CWA programs, including those statutory schemes governing discharges of dredged or fill material under Section 404, administered jointly by the United States Army Corps of Engineers (the “Corps”) and EPA; discharges of pollutants from “point sources” under Section 402, delegated to most states for permitting under the National Pollution Discharge Elimination System; and spills of oil and hazardous substances under Section 311. Historically, EPA and the Corps have defined WOTUS to mean all waters that “could affect interstate or foreign commerce” and adjacent wetlands as wetlands “bordering, contiguous [to], or neighboring” WOTUS.² 

In this long-lived case,³ Michael and Chantell Sackett bought property near Priest Lake, Idaho, in 2004 and started backfilling it with dirt and rocks to build a home on the property.⁴ EPA sent the Sacketts a compliance order alleging violations of the CWA based on the presence of protected wetlands⁵—which in this case meant wetlands adjacent to an “unnamed tributary” feeding into a non-navigable creek that feeds into Priest Lake—and ordered them to immediately restore the wetlands. The Sacketts then sued EPA under the Administrative Procedure Act, and the case ultimately made its way to the Supreme Court over a span of 15 years.⁶

Opinion

In a prior Supreme Court decision, Rapanos v. United States, 547 U.S. 715 (2006), a four-justice plurality concluded that the CWA only applied to “certain relatively permanent bodies of water connected to traditional interstate navigable waters” and “wetlands with such a close physical connection to those waters that they were “as a practical matter indistinguishable from waters of the United States.””⁷ In a concurring opinion in Rapanos, Justice Kennedy stated that federal jurisdiction applies when a “significant nexus” is present between particular wetlands and a water commonly understood as navigable—when wetlands, alone or combined with others similarly situated, “significantly affect the chemical, physical, and biological integrity” of a traditionally navigable water. Kennedy asserted that the Corps must determine on a case-by-case basis whether a “significant nexus” exists for wetlands adjacent to non-navigable tributaries, until more specific regulations address the issue. Following Rapanos, EPA and the Corps promulgated various regulations to limit the effect of this decision.

According to Justice Alito, writing the majority opinion of the Court in the Sackett case, EPA and the Corps considered the “significant nexus” test sufficient to establish jurisdiction over “adjacent” wetlands. And Justice Alito stated that EPA and the Corps “admitted that “almost all waters and wetlands across the country theoretically” could be susceptible to regulation under that test.”⁸

The Sackett majority held that the Rapanos plurality’s interpretation of “waters of the United States” to mean “bodies of open water” aligned with the dictionary definition of “waters,” the use of the term “navigable” waters, and other references to “waters” in the CWA and other US statutes.⁹ The Sackett majority also pointed to previous cases interpreting WOTUS to mean open, navigable waters.¹⁰

All nine Supreme Court justices agreed that the mere presence of water is not enough for federal agencies to assert jurisdiction over wetlands as “waters.”¹¹ Rather, the Sackett majority noted that EPA has no “statutory basis” to impose the “significant nexus” test, and held that federal jurisdiction over wetlands applies only to those wetlands that have “a continuous surface connection to bodies that are ‘waters of the United States’ in their own right, so that there is no clear demarcation between ‘waters’ and wetlands.”¹² As a basis for limiting jurisdiction in this way, the Court emphasized that “[r]egulation of land and water use lies at the core of traditional state authority.”¹³ Accordingly, the Court stated that Congress must be “exceedingly” clear in demonstrating an intent to “significantly alter the balance between federal and state power and the power of the Government over private property,”¹⁴ and the Court did not consider the CWA to be exceedingly clear in that regard. To the contrary, the Court stated that the “vagueness” of the “significant nexus” test raised “serious . . . concerns in light of the CWA’s criminal penalties.”¹⁵ The Court explained that because some CWA violations are crimes, due process concerns require the CWA to have “‘sufficient definiteness that ordinary people can understand what conduct is prohibited’” so that it “‘does not encourage arbitrary and discriminatory enforcement.’”¹⁶ 

Conclusion

The holding in Sackett limited the reach of the CWA to wetlands that have a continuous surface connection to otherwise protected WOTUS. This has far-reaching implications. First, with the narrowing of CWA jurisdiction to exclude wetlands that do not have a continuous surface connection to WOTUS, certain projects, where such wetlands are present, that would otherwise have required federal permits may not need them going forward. In other words, the decision may make it easier to develop significant areas of land. Some industry groups have even argued that the expanded areas that may be developed without permits in the wake of Sackett could help facilitate the development of housing substantially enough to alleviate the nationwide housing crisis.¹⁷ However, it remains to be seen how the decision will impact the process for obtaining and renewing permits, particularly as other concerns (such as flood control) remain relevant and as states and local authorities consider how to regulate future development following Sackett.

This decision may encourage states and local authorities to take bolder environmental action. For example, states with environmental laws that are more robust than the federal CWA are likely to continue enforcing them, and those states may even increase enforcement under state laws post-Sackett. California environmental laws, such as the Porter-Cologne Act and the California Environmental Quality Act, will continue to apply to wetlands expanding beyond the new definition of WOTUS.

This decision marks the first major environmental decision by the current Supreme Court. Another important case is expected to be decided in 2024: Loper Bright Enterprises v. Raimondo. That case involves a group of commercial fishing companies challenging a rule issued by the National Marine Fisheries Service requiring the companies to fund compliance monitoring. The Supreme Court granted certiorari to review that case, on the question of whether to overturn Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), a landmark decision that generally requires courts to defer to agency interpretations of statutes that the agencies administer. Sackett signals that the current Court may be inclined to reduce the power of regulatory agencies in the environmental context.