In 2023, the U.S. Supreme Court issued a landmark decision pertaining to federal jurisdiction over wetlands. The case, known as Sackett v. EPA, 598 U.S. 651 (2023), appears to have reduced federal jurisdiction over wetlands. Now, an even more recent decision called Loper Bright Enters. v. Raimondo, 2024 U.S. LEXIS 2882 (2024) stands to reduce that jurisdiction even further.[1]
Prior to Sackett, federal jurisdiction over wetlands was determined by the so-called “significant nexus test.” Under that test, the Army Corps and/or EPA could exercise federal jurisdiction even over “[i]ntrastate lakes and ponds, streams, or wetlands that either have a continuous surface connection to categorically included waters or have a significant nexus to interstate or traditional navigable waters.” Sackett at 653. The test was vague and difficult to define, and the results were unpredictable. Not surprisingly, the Army Corps and EPA often took a broad view of federal jurisdiction, finding jurisdiction even over inland areas far removed from any navigable waterbody.
However, in Sackett the Supreme Court struck down the significant nexus test. In Sackett, private landowners purchased a lot near a small lake and began backfilling their property to support the construction of a modest home. Id. at 662. The EPA demanded that the Sacketts stop work and restore the site to its previous condition, claiming that their property contained federal wetlands. Id. According to the EPA, the wetlands on the Sacketts’ property were under federal jurisdiction because they were:
[A]djacent to (in the sense that they are in the same neighborhood as) what it described as an ‘unnamed tributary’ on the other side of a 30-foot road. That tributary feeds into a non-navigable creek, which, in turn, feeds into Priest Lake, an intrastate body of water that the EPA designated as traditionally navigable.
Sackett at 662-663. But as the Supreme Court explained, such an attenuated connection to navigable waters is insufficient to support federal jurisdiction. Therefore, because the wetlands on the Sacketts’ property were not indistinguishable from federal waters, the Army Corps/EPA lacked jurisdiction. After Sackett, federal jurisdiction exists only over:
[T]hose wetlands that are as a practical matter indistinguishable from waters of the United States. This requires the party asserting jurisdiction over adjacent wetlands to establish first, that the adjacent [body of water constitutes] . . . water[s] of the United States, (i.e., a relatively permanent body of water connected to traditional interstate navigable waters); and second, that the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.
Sackett at 678-679 (internal citations omitted). But even after Sackett, the Army Corps and EPA have continued, in many cases, to take a wide view of federal jurisdiction. Even with the Supreme Court having explicitly limited the federal government’s jurisdiction, the agency jurisdictional determinations were awarded a wide degree of deference by the Courts. All this may have changed in June of 2024 with the release of the highly-anticipated Loper Bright Enters opinion.
As background, ever since the Supreme Court decided Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984), the Courts have afforded regulatory agencies wide latitude in regulatory interpretation. Under the so-called “Chevron deference” doctrine, if a statute or regulation was considered “ambiguous,” the Courts would generally follow the agencies’ interpretation even if the Court’s own interpretation was different.
However, on June 28, 2024, the Supreme Court overruled Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., ending judicial deference to administrative agencies. Loper Bright makes it clear that the Courts – not the agencies themselves – must interpret statutes and determine the limits of agency powers.
As the Supreme Court explained, “Chevron is overruled. Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the [Administrative Process Act] requires.” Loper Bright Enters. v. Raimondo at *61-62.
The end of “Chevron deference” stands to have major implications regarding federal wetlands jurisdiction. This is because – if the Army Corps or EPA claims to have jurisdiction – the agencies will have to prove their jurisdiction to the Court. This was true even before the end of Chevron deference, but is particularly important now.
For example, in Sackett, the EPA argued that the Court should defer to its interpretation of the term “adjacent” to include attenuated connections like the one on the Sacketts’ property. The Supreme Court rejected the EPA’s overly-broad interpretation, stating:
The EPA resists this reading of §1362(7) and instead asks us to defer to its understanding of the CWA’s jurisdictional reach, as set out in its most recent rule defining “the waters of the United States.” This rule, as noted, provides that ‘adjacent wetlands are covered by the Act if they ‘possess a significant nexus’ to traditional navigable waters. And according to the EPA, wetlands are ‘adjacent’ when they are ‘neighboring’ to covered waters, even if they are separated from those waters by dry land.
For reasons already explained, this interpretation is inconsistent with the text and structure of the CWA. Beyond that, it clashes with ‘background principles of construction’ that apply to the interpretation of the relevant statutory provisions. Under those presumptions, the EPA must provide clear evidence that it is authorized to regulate in the manner it proposes.
Sackett at 679. In other words, even before the end of Chevron deference, the Supreme Court rejected assertions of authority based on the Army Corps’ and EPA’s sometimes overbroad regulatory interpretation. Now that Chevron deference is a thing of the past, it seems that federal jurisdiction over wetlands will be reduced to those areas that are actually connected to a “Water of the United States,” with inland wetlands subject only to state regulations.
[1] The federal cases cited here have no effect on wetlands regulations by state agencies.
Bryan Peeples is a Pender and Coward shareholder and focuses his practice in the areas of maritime and riparian law, eminent domain/right of way law, and worker’s compensation. A prolific author, Bryan has written articles on Virginia aquaculture and maritime law, including the Chesapeake Bay Preservation Act, the Virginia Primary Sand Dune and Beaches Act, and the Virginia Tidal Wetlands Act. He has been published in a number of professional journals on a variety of topics, ranging from Virginia real property law to the Anti-Terrorism Act. Bryan is a member of the firm’s waterfront law practice group, and writes blog articles regularly on the group’s website devoted to waterfront (riparian) property rights law, maritime and admiralty law, and environmental law. Please click here to visit the waterfront law team’s website.
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