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State v. Wheeler

United States District Court, S.D. Georgia, Brunswick Division

August 21, 2019

STATE OF GEORGIA, et al., Plaintiffs,
ANDREW R. WHEELER, in his official capacity as Acting Administrator, U.S. Environmental Protection Agency, et al., Defendants.



         Before the Court is a challenge to a 2015 administrative regulation defining “waters of the United States” (hereinafter, the “WOTUS Rule”) under the Clean Water Act (“CWA”), 33 U.S.C. §§ 1344, 1362(7) (2018). Congress enacted the CWA in 1972 “to restore and maintain the chemical, physical, and biological integrity of the Nation's waters.” Id. § 1251(a). To accomplish that goal, Congress implemented permitting requirements in the CWA for discharging pollutants into the nation's “navigable waters.” Id. § 1311(a), § 1362(12), (14). Congress defined “navigable waters” to mean “the waters of the United States, including the territorial seas.” Id. § 1362(7). To carry out the requirements of the CWA, Congress delegated authority under the Act to the administrators of the United States Environmental Protection Agency (“EPA”) and the United States Army Corps of Engineers (“the Corps”) (collectively “the Agencies”). See id. § 1361(a). The issues in this case are whether the Agencies extended their jurisdiction beyond the limits of the CWA, failed to adhere to the procedures of the Administrative Procedure Act (“APA”), 5 U.S.C. § 706(2)(A), and violated the Constitution by promulgating the WOTUS Rule.

         After analyzing the administrative record, and for the reasons explained below, the Court holds that the WOTUS Rule extends the Agencies' delegated authority beyond the limits of the CWA, and thus is not a permissible construction of the phrase “waters of the United States” within the statute, and that the Agencies' promulgation of the WOTUS Rule violates the APA's procedural requirements. Therefore, Plaintiffs' Motions for Summary Judgment, dkt. nos. 199, 203, are GRANTED. Intervenor Defendants' Motion, dkt. no. 211, is DENIED. The WOTUS Rule is hereby REMANDED to the Agencies for further proceedings consistent with this Order. Intervenor Plaintiffs' Motion to Amend the Court's Preliminary Injunction, dkt. no. 208, is DENIED at this time. The Court's Preliminary Injunction, dkt. no. 174, will REMAIN in place pending the outcome of the ongoing administrative proceedings regarding the WOTUS Rule.


         Plaintiffs State of Georgia, State of West Virginia, State of Alabama, State of Florida, State of Kansas, Commonwealth of Kentucky, State of South Carolina, and State of Utah (“the States” or “State Plaintiffs”)[1] filed the present lawsuit on June 30, 2015 against the administrators of the EPA and the Corps challenging the promulgation of a final agency rule defining the term “waters of the United States, ” Clean Water Rule: Definition of “Waters of the United States, ” 80 Fed. Reg. 37, 054 (June 29, 2015) (to be codified at 33 C.F.R. pt. 328), as used in the CWA, 33 U.S.C. §§ 1344, 1362(7). Dkt. No. 1. Since then, the State Plaintiffs have been joined by the American Farm Bureau Federation, American Forest & Paper Association, American Petroleum Institute, American Road and Transportation Builders Association, Georgia Association of Manufacturers, Georgia Farm Bureau Federation, Leading Builders of America, National Alliance of Forest Owners, National Association of Home Builders, National Association of Manufacturers, National Cattlemen's Beef Association, National Corn Growers Association, National Mining Association, National Pork Producers Council, National Stone, Sand, and Gravel Association, Public Lands Council, and U.S. Poultry & Egg Association (collectively “the Intervenor Plaintiffs”) as intervening plaintiffs. Dkt. Nos. 178, 187. Because the Agencies have declined to defend the substantive challenges to the WOTUS Rule in this case, National Wildlife Federation and One Hundred Miles (collectively “the Intervenor Defendants”) intervened to defend the substantive challenges. Dkt. Nos. 136, 182.

         In this case, Plaintiffs claim that the WOTUS Rule should be vacated because it violates the CWA, 33 U.S.C. §§ 1344, 1362(7), the APA, 5 U.S.C. § 706(2)(A), as well as the Commerce Clause and Tenth Amendment of the U.S. Constitution, U.S. Const. art. I, § 8; U.S. Const. amend. X.

         I. The CWA and the WOTUS Rule

         As stated above, Congress enacted the CWA in 1972 “to restore and maintain the chemical, physical, and biological integrity of the Nation's waters.” 33 U.S.C. § 1251(a). One of the CWA's principal tools for achieving that objective is the prohibition of “the discharge of any pollutant” defined as “any addition of any pollutant to navigable waters from any point source, ” and “navigable waters, ” in turn, is defined as “waters of the United States, including the territorial seas.” Id. § 1311(a), § 1362(12), (14), (7). “Because many of the Act's substantive provisions apply to ‘navigable waters,' the statutory phrase ‘waters of the United States' circumscribes the geographic scope of the Act in certain respects.” Nat'l Ass'n of Mfrs. v. Dep't of Def., 583 U.S. __, 138 S.Ct. 617, 624 (2018). The Act also requires that anyone who discharges pollutants into navigable waters obtain a permit. Id. (citing § 1311(a)). The process of obtaining a permit can take years and cost hundreds of thousands of dollars, and discharging into “navigable waters” without a permit can subject the discharging party to a fine of up to $37, 500 per violation, per day, as well as criminal penalties. 22 U.S.C. §§ 1311, 1319, 1365; 74 Fed. Reg. 626, 627-28 (Jan. 7, 2009); Rapanos v. United States, 547 U.S. 715, 721 (2006).

         Responding to calls for precision in the definition of “waters of the United States, ” the Agencies jointly promulgated the WOTUS Rule to “provid[e] simpler, clearer, and more consistent approaches for identifying the geographic scope of the [Act].” 80 Fed. Reg. 37, 054 at 37, 057. The Agencies published the Proposed Rule on April 21, 2014, 79 Fed. Reg. 22, 188, and then promulgated the Final Rule on June 29, 2015, 80 Fed Reg. 37, 054. Under the WOTUS Rule, “waters of the United States” include “(1) All waters which are currently used, were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters which are subject to the ebb and flow of the tide; (2) All interstate waters, including interstate wetlands; [and] (3) The territorial seas” (collectively “primary waters”). 33 C.F.R. § 328.3(a)(1-3). The Rule also covers “(4) All impoundments of waters otherwise identified as waters of the United States under this section.” Id. § 328.3(a)(4). The WOTUS Rule then adds three new categories of waters to the definition of waters of the United States-two that are per se jurisdictional and one that is jurisdictional on a case-by-case basis.

         The first added category of waters is “tributaries.” The Rule covers “[a]ll tributaries” of primary waters. Id. § 328.3(a)(3). The Rule defines tributaries as any water “that contributes flow, either directly or through another water” to a primary water “that is characterized by the presence of the physical indicators of a bed and banks and an ordinary high water mark” (hereinafter “OHWM”). Id. § 328.3(c)(3). The Rule declares for the first time that “remote sensing sources” or “mapping information” can be used to detect these “physical indicators.” 80 Fed. Reg. at 37, 076-78. The WOTUS Rule also envisions the use of “desktop tools” for “hydrologic estimation of a discharge sufficient to create an [OHWM]” to identify the presence of a bed, bank, and OHWM, or even the historical presence of such where physical characteristics are “absent in the field.” Id. at 37, 077.

         The second per se category is “adjacent waters.” The Rule covers “[a]ll waters adjacent to” a primary water, an impoundment, or a tributary, “including wetlands, ponds, lakes, oxbows, impoundments, and similar waters.” Id. § 328.3(a)(6). Under the Rule, “adjacent” means “bordering, contiguous or neighboring” primary waters, impoundments, or tributaries, even if they are separated from the primary water by man-made or natural barriers. Id. § 328.3(c)(1). The Rule further defines “neighboring” to mean: (1)“[a]ll waters located within 100 feet of the [OHWM]” of a primary water, impoundment, or tributary; (2) “[a]ll waters located within the 100-year floodplain” of a primary water, impoundment, or tributary and “not more than 1, 500 feet from the [OHWM] of such water”; and (3) “[a]ll waters located within 1, 500 feet of the high tide line” of a primary water, “and all waters within 1, 500 feet of the [OHWM] of the Great Lakes.” 33 C.F.R. § 328.3(c)(2). The Rule explains that if any portion of a water defined as neighboring is within one of these distance limitations, then the entire water is considered neighboring. Id. The Rule also excludes from the definition of “adjacent” waters those “[w]aters being used for established normal farming, ranching, and silviculture activities.” Id. § 328.3(c)(1).

         The third category does not define waters as per se jurisdictional, but rather determines on a case-by-case basis if waters have a “significant nexus” to a primary water. Id. § 328.3(a)(8). Specifically, this category covers all waters, any part of which are within the “100-year floodplain” of a primary water, and all waters, any part of which are within 4, 000 feet of the high tide line or OHWM of a primary water, impoundment, or tributary “where they are determined on a case-specific basis to have a significant nexus to” a primary water. Id. Under the Rule, a water has a “significant nexus” to a primary water “when any single function or combination of functions performed by the water, alone or together with similarly situated waters in the region, contributes significantly to the chemical, physical, or biological integrity of the nearest” primary water. Id. § 328.3(c)(5). The Rule lists the following functions as relevant to the significant nexus evaluation:

(i) Sediment trapping, (ii) Nutrient recycling, (iii) Pollutant trapping, transformation, filtering, and transport, (iv) Retention and attenuation of flood waters, (v) Runoff storage, (vi) Contribution of flow, (vii) Export of organic matter, (viii) Export of food resources, and (ix) Provision of life cycle dependent aquatic habitat (such as foraging, feeding, nesting, breeding, spawning, or use as a nursery area) for species located in a [primary water].


         Under the WOTUS Rule's new definition of “waters of the United States, ” the Agencies estimated that the Rule would increase federal “positive jurisdictional determinations” in the United States from 2.84% to 4.65% annually. 80 Fed. Reg. at 37, 101. The State Plaintiffs characterize this increase as “unrealistically underinclusive.” Dkt. No. 203 at 17.

         II. Procedural History

         The WOTUS Rule's effective date was August 28, 2015, but the States filed a motion for preliminary injunction on July 21, 2015 to enjoin enforcement of the WOTUS Rule before it became effective. Dkt. No. 32. On August 27, 2015, this Court issued an order denying the preliminary injunction for lack of jurisdiction, holding that original jurisdiction lay with the Courts of Appeals. Dkt. No. 77.

         Meanwhile, similar lawsuits[2] were brought around the country. The same day that this Court decided it lacked jurisdiction (August 27, 2015), the District of North Dakota granted a preliminary injunction to thirteen other states[3] challenging the WOTUS Rule. North Dakota v. E.P.A., 127 F.Supp.3d 1047 (D.N.D. 2015).

         On January 22, 2018, the Supreme Court held that original jurisdiction of this dispute lies with the district courts, not with the Courts of Appeals. Nat'l Ass'n of Mfrs. v. Dep't of Def., 583 U.S. __, 138 S.Ct. 617 (2018). As such, this Court reopened this action and considered the State Plaintiffs' Motion for a Preliminary Injunction, dkt. no. 149, granted the States' Motion, and on June 8, 2018, enjoined enforcement of the WOTUS Rule in the states that were parties to the case. Dkt. No. 174. After issuing the preliminary injunction, the Court allowed the Intervenor Defendants, dkt. no. 182, and the Intervenor Plaintiffs, dkt. no. 187, to join the case as intervening parties. Subsequently, the State Plaintiffs and Intervenor Plaintiffs filed motions for summary judgment on August 31, 2018. Dkt. Nos. 199, 203. Intervenor Plaintiffs also filed a Motion to Amend the preliminary injunction to apply nationwide. Dkt. No. 208. In response to the Plaintiffs' motions for summary judgment, Intervenor Defendants filed a response as well as their own cross-motion for summary judgment. Dkt. Nos. 211, 213. The Agencies responded to the Plaintiffs' motions for summary judgment, but they responded only to the Plaintiffs' procedural claims, deciding not to take a position on the merits of the substantive challenges to the WOTUS Rule. Dkt. No. 219 (correcting prior response at Dkt. No. 215).

         While this case has been pending, things have changed around the country involving the WOTUS Rule. The President of the United States issued an executive order in February 2017 for reconsideration of the WOTUS Rule. Exec. Order No. 13, 778, 82 Fed. Reg. 12, 497 (Feb. 28, 2017). In response, the Agencies proposed a rule on July 27, 2017 that, once implemented, would rescind the WOTUS Rule and recodify the pre-2015 regulatory definition of “waters of the United States.” See Definition of “Waters of the United States” - Recodification of Pre-Existing Rules, 82 Fed. Reg. 34899, 34901-02. Then, in November 2017, following oral argument in National Association of Manufacturers v. Department of Defense, 138 S.Ct. at 617, the Agencies proposed another new rule. That rule, known as the “Applicability Rule, ” became final on February 6, 2018. Definition of “Waters of the United States”-Addition of an Applicability Date to 2015 Clean Water Rule, 83 Fed. Reg. 5, 200 (Feb. 6, 2018) (to be codified at 33 C.F.R. pt. 328). The Applicability Rule is identical to the WOTUS Rule but provides an effective date of February 6, 2020. Various parties then challenged the Applicability Rule in several lawsuits.[4] On August 16, 2018, a court in the District of South Carolina enjoined the Applicability Rule from taking effect for violating the APA. S.C. Coastal Conservation League v. Pruitt, 318 F.Supp.3d 959, 969 (D.S.C. 2018). Then, on November 26, 2018, a court in the Western District of Washington vacated the Applicability Rule for violating the APA. Puget Soundkeeper All. v. Wheeler, No. C15-1342-JCC, 2018 WL 6169196, at *7 (W.D. Wash. Nov. 26, 2018). As a result of these two decisions, the WOTUS Rule went into effect in the twenty-two states (and the District of Columbia) that are not covered by either this Court's or another court's preliminary injunction. See Dkt. No. 208 at 7. Then, on December 11, 2018, the Agencies announced a new proposed rule revising the definition of “waters of the United States” to replace the 2015 WOTUS Rule at issue in this case. Dkt. No. 233 at 3. That proposed rule was published in the Federal Register for notice and comment on February 14, 2019. Revised Definition of “Waters of the United States, ” 84 Fed. Reg. 4154 (Feb. 14, 2019) (to be codified at 33 C.F.R. pt. 328). Finally, on May 28, 2019, the District Court for the Southern District of Texas found that the WOTUS Rule violated the APA and remanded the Rule to the Agencies. Texas v. United States Envtl. Prot. Agency, No. 3:15-CV-00162, 2019 WL 2272464, at *1 (S.D. Tex. May 28, 2019).


         Because the CWA does not provide a separate standard of review of EPA decisions, judicial review of final EPA actions is governed by the Administrative Procedure Act (“APA”), 5 U.S.C. § 706. See Nat'l Ass'n of Mfrs. v. Dep't of Def., 138 S.Ct. 617, 623 (2018). Under the APA, a court may “hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; . . . in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; [or] without observation of procedure required by law.” 5 U.S.C. § 706 (2).

         “[W]hen a party seeks review of agency action under the APA [before a district court], the district judge sits as an appellate tribunal.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir. 2001). Challenges to agency action under the APA are properly adjudicated on cross-motions for summary judgment. See, e.g., Fla. Fruit & Vegetable Ass'n v. Brock, 771 F.2d 1455, 1459 (11th Cir. 1985) (“The summary judgment procedure is particularly appropriate in cases in which the court is asked to review . . . a decision of a federal administrative agency.”). However, the standards set forth in Federal Rule of Civil Procedure 56 do not apply. Fulbright v. McHugh, 67 F.Supp.3d 81, 89 (D.D.C. 2014), aff'd sub nom. Fulbright v. Murphy, 650 Fed.Appx. 3 (D.C. Cir. 2016) (explaining that although “summary judgment is an appropriate procedure for resolving” APA challenges, “the standard set forth in Rule 56(a) does not apply”). Therefore, “[a]t the summary judgment stage [of APA challenges] the court does not look at whether there is a genuine issue of material fact, but instead turns directly to the question of the validity of the challenge.” Malladi v. Brown, 987 F.Supp. 893, 922 (M.D. Ala. 1997), aff'd sub nom. United States v. Ponder, 150 F.3d 1197 (11th Cir. 1998). The Court's judicial review in this case is limited to the administrative record. Camp v. Pitts, 411 U.S. 138, 142 (1973) (“[T]he focal point for judicial review should be the administrative record already in existence, not some new record made initially in the reviewing court.”)


         The Plaintiffs raise various substantive and procedural challenges against the WOTUS Rule. Before reaching those issues, the Court will determine in Section I whether the Plaintiffs' challenges in this case are ripe. Proceeding to the merits of the challenges, the Court will analyze the Plaintiffs' arguments under the CWA in Section II. In Section III, the Court will address Plaintiffs' procedural challenges to the WOTUS Rule under the APA. Finally, the Court will address the constitutional challenges to the Rule in Section IV.

         I. Ripeness

         Before reaching the merits of this case, the Court must first determine whether this case is ripe for review. The Agencies argue that the case is not ripe and that the Court should decline to decide the case on the merits because the WOTUS Rule is currently stayed under this Court's preliminary injunction and the Agencies are actively working to repeal the WOTUS Rule and replace it with a new rule. In other words, the Agencies contend that this case is not prudentially ripe. Plaintiffs argue that this case is ripe because a final rule has been promulgated, the WOTUS Rule would otherwise be in effect if not for this Court's preliminary injunction, and therefore, a live case and controversy exists. After considering these arguments, the Court determines that the case is ripe for review.

         The Court first notes that the Supreme Court has relatively recently called the prudential ripeness doctrine into question (although it has declined to directly address the matter). The Supreme Court has stated that the doctrine “is in tension with our recent affirmation of the principle that ‘a federal court's obligation to hear and decide' cases within its jurisdiction ‘is virtually unflagging.'” Susan B. Anthony List v. Driehaus, 573 U.S. 149, 167 (2014) (citations omitted); see also Fla. Panthers v. Collier Cty., Fla., No. 213CV612FTM29DNF, 2016 WL 1394328, at *11 (M.D. Fla. Apr. 8, 2016) (“[T]he Court also rejects plaintiffs' reliance on ‘prudential' principles relating to ripeness. A unanimous Supreme Court has retreated from ‘prudential' standing principles not founded on Article III requirements, and the Supreme Court has declined to consider the continuing vitality of the prudential ripeness doctrine where there was a sufficient Article III injury.” (citations omitted)). Additionally, the Supreme Court in addressing the jurisdictional issues involving judicial review of the WOTUS Rule stated that “[b]ecause the WOTUS Rule remains on the books for now, the parties retain ‘a concrete interest' in the outcome of this litigation, and it is not ‘impossible for a court to grant any effectual relief . . . to the prevailing party, '” and that this remained true even if the Agencies finalized and implemented the Applicability Rule. Nat'l Ass'n of Mfrs., 138 S.Ct. at 627 (citation omitted). Thus, it appears that this Court can and should decide this case, despite the Agencies' prudential ripeness arguments.

         Nevertheless, even under the prudential ripeness doctrine, the Court determines that the challenge to the WOTUS Rule in this case is ripe for review. The prudential ripeness doctrine is designed “to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.” Nat'l Park Hosp. Ass'n v. Dep't of Interior, 538 U.S. 803, 807-08 (2003). “Determining whether administrative action is ripe for judicial review requires [the Court] to evaluate (1) the fitness of the issues for judicial decision and (2) the hardship to the parties of withholding court consideration.” Id. at 808. In applying these two prongs, courts also consider “(1) whether delayed review would cause hardship to the plaintiffs; (2) whether judicial intervention would inappropriately interfere with further administrative action; and (3) whether the courts would benefit from further factual development of the issues presented.” Pittman v. Cole, 267 F.3d 1269, 1278 (11th Cir. 2001) (citations omitted).

         Turning to the fitness prong, this case is fit for review. The Eleventh Circuit has explained that the need for factual development and interference with administrative procedures, specifically before an agency has the opportunity to finalize its policies, raise fitness concerns. Pittman, 267 F.3d at 1278. However, no such fitness concerns exist in this case. First, the WOTUS Rule is a final agency action because it is a rule that has been promulgated through notice and comment rulemaking, and it would be in effect in the Plaintiff States if not for this Court's preliminary injunction. Second, there is no need for further factual development in this case. Cf. Nat'l Park Hosp. Ass'n, 538 U.S. at 812 (finding case not fit for review where despite the agency action being final, factual development would “significantly advance [the Court's] ability to deal with the legal issues presented” (citation omitted)). The Court has the benefit of a very detailed administrative record, Supreme Court precedent directly on point, and the Parties' briefs which highlight and organize the substantive and procedural issues before the Court in this case. Third, the Court's adjudication of this case would not interfere with administrative procedures, especially in light of its ultimate remedy; rather, it would assist in clarifying the substantive and procedural problems with the WOTUS Rule, many of which the Agencies highlight in their brief in pointing to the proposed repeal of the WOTUS Rule. See Dkt. No. 219 at 14. The Agencies argue that the Court would interfere because the Agencies are working to repeal and replace the WOTUS Rule. However, the Court finds that ruling on the merits while also tailoring the remedy to avoid unnecessary interference with the administrative process will both serve the Court's role to adjudicate cases before it and assist in the Agencies' ongoing administrative proceedings involving the WOTUS Rule.

         As for hardship, the Eleventh Circuit has explained that “[w]here . . . there are no significant agency or judicial interests militating in favor of delay, [lack of] ‘hardship' cannot tip the balance against judicial review.” Harrell v. Fla. Bar, 608 F.3d 1241, 1259 (11th Cir. 2010). Still, Plaintiffs can satisfy the hardship prong. The WOTUS Rule is a final agency rule that expands the scope of federal jurisdiction over waters of the United States, which, in combination with the permitting requirements of the CWA, would cause significant and unrecoverable economic harm to the State Plaintiffs if they were forced to comply with the Rule. As detailed in this Court's preliminary injunction, adhering to the WOTUS Rule would cost the State Plaintiffs millions of dollars in unrecoverable funds, not to mention the unrecoverable loss of state sovereignty. See Dkt. No. 174 at 19.

         The Agencies argue that Plaintiffs are not currently harmed by the WOTUS Rule because it has been enjoined by this Court. While this is technically true, it does not mean that the Plaintiffs do not have a right to challenge the merits of an allegedly unlawful rule heard and considered. Moreover, preliminary injunctions are “by [their] very nature, interlocutory, tentative, provisional, ad interim, impermanent, mutable, not fixed or final or conclusive.” Eastman Kodak Co. v. Fotomat Corp., 317 F.Supp. 304, 325 (N.D.Ga. 1969). They are not meant to be final decisions. Thus, while this Court's remedy will keep the preliminary injunction in place, it does so only after the Court has fully addressed the merits of Plaintiffs' challenge and only to allow the administrative process to play out in light of this decision. Therefore, the Court will adhere to its virtually unflagging obligation to hear and decide this case while also balancing that obligation with the realities of the ongoing administrative process.

         II. CWA

         Plaintiffs bring several challenges against the WOTUS Rule under the CWA. Specifically, Plaintiffs argue that the Rule is unlawful under the CWA because, based on the Supreme Court's interpretation of the CWA, the Rule extends the Agencies' jurisdiction over water and land in the United States beyond their delegated authority provided by the Act. Plaintiffs argue that the WOTUS Rule is unlawful under the CWA with respect to its definitions of interstate waters, tributaries, adjacent waters, and case-by-case waters. Additionally, Plaintiffs argue that the WOTUS Rule violates the CWA because it significantly interferes with land and waters traditionally under state authority without clear intent from Congress to allow that interference. After carefully reviewing the administrative record, the Court finds that the WOTUS Rule violates the CWA.

         A. Background on Supreme Court's Interpretation of the CWA

         On a few occasions, the Supreme Court has interpreted the breadth of federal jurisdiction within the term “navigable waters” in the CWA. The first was in United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985). In Riverside Bayview, “the Court upheld the Corps' jurisdiction over wetlands adjacent to navigable-in-fact waterways.” Rapanos, 547 U.S. at 766 (Kennedy, J., concurring) (citing Riverside Bayview, 474 U.S. at 139). The case involved a wetland that directly abutted a navigable-in-fact creek that fed into Lake St. Clair, and the Court held that “the Corps' ecological judgment about the relationship between waters and their adjacent wetlands provides an adequate basis for a legal judgment that adjacent wetlands may be defined as waters under the Act.” Riverside Bayview, 474 U.S. at 131, 134. “The Court reserved, however, the question of the Corps' authority to regulate wetlands other than those adjacent to open waters.” Rapanos, 547 U.S. at 766 (Kennedy, J., concurring) (citing Riverside Bayview, 474 U.S. at 131-132, n.8).

         About fifteen years later, in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (“SWANCC”), 531 U.S. 159, 162 (2001), the Court addressed whether “navigable waters” as defined in the CWA extended to “an abandoned sand and gravel pit in northern Illinois which provid[ed] habitat for migratory birds.” The land at issue in SWANCC was a long-abandoned sand and gravel pit mining operation that had given way to a “successional stage forest, with its remnant excavation trenches evolving into a scattering of permanent and seasonal ponds.” Id. at 163. The Corps asserted jurisdiction over these ponds when the plaintiff applied for a permit to dispose nonhazardous solid waste on the site. The Corps based its jurisdiction on the Migratory Bird Rule which classified the ponds as “waters of the United States” because they were “used as habitat by other migratory birds which cross state lines.” Id. at 163-64 (quoting 51 Fed. Reg. 41206, 41217 (Nov. 13, 1986) (to be codified at 33 C.F.R. pts. 320-30)). Distinguishing the facts of SWANCC from the prior holding of Riverside Bayview, the Court stated that “[i]t was the significant nexus between the wetlands and ‘navigable waters' that informed our reading of the CWA in Riverside Bayview.” Id. at 167. The Court found that extending jurisdiction under the CWA to isolated, intrastate ponds based on their use as a habitat for migratory birds would read “the term ‘navigable waters' out of the statute, ” thereby violating the plain language of the CWA. Id. at 172. The Court reasoned that although it had said in Riverside Bayview that the word “navigable” was of “limited import, ” it “is one thing to give a word a limited effect and quite another to give it no effect whatever.” Id. (citing Riverside Bayview, 474 U.S. at 133).

         Five years later, the Court issued its most recent decision on the scope of the CWA's coverage of “navigable waters” in Rapanos v. United States, 547 U.S. at 715. At issue in Rapanos was the Corps' assertion of jurisdiction-based on its then definition of “waters of the United State”-over wetlands adjacent to tributaries that eventually empty into traditional navigable waters. The Court failed to reach a majority opinion. A four-justice plurality found that the “Corps' expansive interpretation of . . . waters of the United States is . . . not based on a permissible construction of the [CWA]” and held that waters of the United States only included “relatively permanent, standing or continuously flowing bodies of water” and that only wetlands with a continuous surface connection to those relative permanent waters could be considered “adjacent” under the CWA. Id. at 739, 742. A four-justice dissent deferred to the Corps' broad interpretation of the CWA finding that the assertion of jurisdiction over wetlands adjacent to other waters, including tributaries, was reasonable under the statute. Id. at 787-88 (Stevens, J., dissenting).

         Justice Kennedy wrote a concurring opinion that was more limited than the dissent's expansive reading but also broader than the plurality's narrow reading. Taking language from SWANCC, he established a different rule: the significant-nexus test. Summarizing the Court's prior cases on the issue, Justice Kennedy explained that

[t]aken together these cases establish that in some instances, as exemplified by Riverside Bayview, the connection between a nonnavigable water or wetland and a navigable water may be so close, or potentially so close, that the Corps may deem the water or wetland a “navigable water” under the Act. In other instances, as exemplified by SWANCC, there may be little or no connection. Absent a significant nexus, jurisdiction under the Act is lacking.

Id. at 767 (Kennedy, J., concurring). Justice Kennedy held that wetlands possess a significant nexus, “and thus come within the statutory phrase ‘navigable waters, '” when they, “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.'” Id. at 780 (Kennedy, J., concurring). In contrast, when “‘wetlands' effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term ‘navigable waters.'” Id.

         Based on this rule, Justice Kennedy held-based on the reasonable inference of ecologic interconnection-that the Corps' assertion of jurisdiction over wetlands adjacent to navigable-in-fact waters was lawful under Riverside Bayview. But, he also found that while the Corps could “identify categories of tributaries that, due to their volume of flow . . ., their proximity to navigable waters, or other relevant considerations, are significant enough that wetlands adjacent to them are likely, in the majority of cases, ” to have a significant nexus to navigable waters, the “Corps' existing standard for tributaries . . . provides no such assurance.” Id. at 781 (Kennedy, J., concurring). He found that the Corps' existing definition of tributaries, which included waters that “feed[] into a traditional navigable water (or tributary thereof) and possess an [OHWM], ” was so broad that it left “wide room for regulation of drains, ditches, and streams remote from any navigable-in-fact water and carrying only minor water volumes toward it.” Id. As a result, he found that the breadth of that definition of tributaries “preclud[ed] its adoption as the determinative measure of whether adjacent wetlands are likely to play an important role in the integrity of an aquatic system comprising navigable waters as traditionally understood.” Id. Under that standard, he found that “in many cases” wetlands adjacent to tributaries would be “little more related to navigable-in-fact waters than were the isolated ponds held to fall beyond the Act's scope in SWANCC.” Id. at 781-82 (Kennedy, J., concurring). Therefore, Justice Kennedy concluded that “[a]bsent more specific regulations . . ., the Corps must establish a significant nexus on a case-by-case basis when it seeks to regulate wetlands based on adjacency to nonnavigable tributaries.” Id. at 782 (Kennedy, J., concurring).

         Despite the Supreme Court's failure to reach a majority opinion in Rapanos, the Eleventh Circuit has determined that Justice Kennedy's concurring opinion controls. United States v. Robinson, 505 F.3d 1208, 1221 (2007) (“[W]e join the Seventh and Ninth Circuits' conclusion that Justice Kennedy's ‘significant nexus' test provides the governing rule of Rapanos.”). Thus, the Court is bound to apply Justice Kennedy's significant-nexus test to the WOTUS Rule in this case. See id. at 1222 (“[U]nder Justice Kennedy's concurrence, a water can be considered ‘navigable' under the CWA only if it possess a ‘significant nexus' to waters that ‘are or were navigable in fact or that could reasonably be so made.'” (quoting Rapanos, 547 U.S. at 759 (Kennedy, J., concurring))).

         B. Judicial Review of Agency Action and Deference under CWA

         Before getting to the merits of Plaintiffs' challenges to the WOTUS rule under the CWA, the Court must first determine what type of judicial review to apply to these claims. The parties sharply disagree on this matter. Plaintiffs couch their arguments against the WOTUS Rule in terms of the Rule violating the CWA and exceeding the Agencies' authority under the CWA, and they contend that the Agencies' interpretation of the CWA in the Rule is not entitled to Chevron deference. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984). Intervenor Defendants articulate their defense of the Rule in terms of highly deferential arbitrary and capricious review and assert that the WOTUS Rule is entitled to Chevron deference.

         The Court first determines that the challenge in this case under the CWA is properly characterized as a challenge to the Agencies' authority under the CWA and its interpretation of “waters of the United States.” In other words, the issues under the CWA are those of law and statutory interpretation. As such, Plaintiffs' challenges under the CWA most aptly fall under the APA as claims that an agency action was “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right” rather than claims that the action was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A), (C). Therefore, the Court must determine if the Agencies' interpretation of the phrase “waters of the United States” exceeded their statutory authority by extending their jurisdiction over waters beyond those which Congress intended the CWA to cover.

         Because this case involves the Agencies' interpretation of the CWA, it invokes the well-known Chevron deference standard. See Chevron, 467 U.S. at 843. The Chevron doctrine can be summarized as follows:

First, applying the ordinary tools of statutory construction, the court must determine whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. But if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.

City of Arlington, Tex. v. F.C.C., 569 U.S. 290, 296 (2013). However, Chevron's application in this case is not so straightforward. First, “[i]t goes without saying that if an agency action exceeds its statutory authority, the agency is entitled to no deference under Chevron.” Glob. Tel*Link v. Fed. Commc'ns Comm'n, 866 F.3d 397, 417 (D.C. Cir. 2017). Therefore, while it is clear that the Agencies had authority to pass regulations interpreting the phrase “waters of the United States, ” that authority is not limitless. Second, the Court is not “obliged to defer to an agency's interpretation of Supreme Court precedent under Chevron or any other principle.” Akins v. Fed. Election Comm'n, 101 F.3d 731, 740 (D.C. Cir. 1996) (en banc), vacated on other grounds, 524 U.S. 11, 13 (1998); see also Employer Sols. Staffing Grp. II, L.L.C. v. Office of Chief Admin. Hearing Officer, 833 F.3d 480, 484 (5th Cir. 2016) (“[A]n agency's interpretations of caselaw are reviewed de novo.”). Thus, the Agencies' interpretation of Justice Kennedy's significant-nexus test, or any other part of his opinion in Rapanos, is not entitled to deference.

         To the extent that Chevron does apply to the Agencies' interpretations of the CWA in the WOTUS Rule, the plurality and Justice Kennedy in Rapanos make clear that any deference owed to those interpretations has limits. Justice Scalia, writing for the plurality, ruled that “waters of the United States . . . does not include channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall.” Rapanos, 547 U.S. at 739. Based on this rule, he quoted Chevron when he concluded that “[t]he Corps' expansive interpretation of ‘the waters of the United States' is thus not ‘based on a permissible construction of the statute.'” Id. (quoting Chevron, 467 U.S. at 843). Furthermore, in criticizing the dissent's deference to the Corps, Justice Scalia conceded that “‘waters of the United States' is in some respects ambiguous” but found that “[t]he scope of that ambiguity . . . does not conceivably extend to whether storm drains and dry ditches are ‘waters,' and hence does not support the Corps' interpretation.” Id. at 752 (emphasis in original). He also criticized Justice Stevens' dissent by stating that “[h]is error consists of giving that agency more deference than reason permits.” Id. at 756. Justice Roberts, in his concurrence, recognized that agencies had “generous leeway” to interpret statutes and that “[g]iven the broad, somewhat ambiguous, but nonetheless clearly limiting terms Congress employed in the [CWA], the Corps and the EPA would have enjoyed plenty of room to operate in developing some notion of an outer bound to the reach of their authority.” Id. at 758 (Roberts, J., concurring). However, he found that “[r]ather than providing guidance meriting deference under our generous standards, the Corps chose to adhere to its essentially boundless view of the scope of its power.” Id. Finally, Justice Kennedy believed that the plurality's limits under the CWA gave “insufficient deference . . . to the authority of the Executive to implement [the CWA], ” but he also found that the dissent's deference to the Corps extended too far. Id. at 778 (Kennedy, J., concurring). Specifically, he found that “the dissent would permit federal regulation whenever wetlands lie alongside a ditch or drain, however remote and insubstantial, that eventually may flow into traditional navigable waters, ” and concluded that “the deference owed to the Corps' interpretation of the statute does not extend so far.” Id.

         What these statements from Rapanos show is that, despite the deferential standard of Chevron, both the plurality and Justice Kennedy understood the CWA to have limits on how far the Agencies could extend their jurisdiction over waters through interpreting the CWA. Although the plurality and Justice Kennedy disagreed with what those limits were, for the purposes of this case, the limits of Justice Kennedy's significant-nexus test apply. See Robinson, 505 F.3d at 1221 (holding that Justice Kennedy's opinion in Rapanos is controlling). As such, this Court must review the WOTUS Rule's interpretation of “waters of the United States” in light of those limits to the CWA. In doing so, the Court determines that the WOTUS Rule extends jurisdiction over “remote and insubstantial” waters, which under Justice Kennedy's opinion in Rapanos, is not a “permissible construction of the statute.” Rapanos, 547 U.S. at 739 (citation omitted). Thus, the Court finds, like Justice Kennedy, that “[t]he deference owed to the Corps' interpretation of the statute does not extend so far.” Rapanos, 547 U.S. at 779 (Kennedy, J., concurring).

         A. ...

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