A Year After Sackett v. EPA: Insights from D.C.-Based Environmental Lawyer Fred Wagner

Ecobot spoke with D.C.-based environmental attorney and WOTUS expert Fred Wagner about this first year in a post-Sackett regulatory landscape. Wagner offers insights on current and pending legislation, predictions for the future, and what it would take to swing the pendulum back toward environmentally favorable wetland protections.

We spoke with Wagner shortly after the decision was made last spring: check out the Ecobite episode.

Key takeaways:

  1. Impact on Water Protection, and Ways to Outperform Weak Policy: Officials from agencies including White House Council for Environmental Quality, EPA, U.S. Army Corps of Engineers, and others expressed strong disagreement with the Sackett, and have proposed alternative efforts as a stopgap for the rollback to environmental protections.
  2. Ongoing Litigation: There is ongoing controversy and litigation regarding the EPA and Army Corps’ interpretation of the Sackett decision. Several cases argue that the recent changes to the rules, such as the removal of the Significant Nexus Test, are arbitrary and capricious.
  3. Future Enforcement Trends: There is speculation that enforcement by agencies like the EPA may shift from preemptive to reactive, focusing more on actions after violations occur rather than preventative measures.
  4. State-Level Actions: States are not precluded by Sackett from implementing more stringent environmental protections. There is an expectation that some states, especially those more vulnerable to environmental risks, may enforce stricter regulations.
  5. Predictions for Business Responses: The business response to the changing regulatory landscape is uncertain. While some businesses may welcome the reduced federal oversight as a reduction in compliance costs, others may prefer a clear and consistent regulatory framework to navigate their operations across state lines.

WAGNER: I just recently had an opportunity to be on a panel at the National Association of Environmental Professionals (NAEP). Somebody asked the CEQ chair [Brenda Mallory] about Sackett, and she said straight out that they strongly disagree with the policy. It’s the law of the land, so they’re abiding by it as the new legal standard, but they disagree with it. The important point is that their policies and their interpretations of their authority are largely driven by the fact that they disagree with the ruling.

There’s broad agreement that the scope of waters that otherwise would have received protection under the Clean Water Act is much smaller. So the federal government is trying to figure out how they can fill the gap—if there are legitimate ways to fill that gap, ways that they can partner with our state agencies, those that are so inclined, to fill in that gap.

There’s been a lot of controversy over that, and there’s been additional litigation claiming that the EPA and the Army Corps are, in essence, either ignoring or misinterpreting the Sackett ruling. There are the generic general cases that are ongoing claiming that the December 2023 final rule is “arbitrary and capricious,” even with the very short update that the EPA and the Corps issued after Sackett.

There are two separate cases—one in Texas, one in North Dakota, where the  states–mostly state litigants, some industries—are claiming that, even with the changes that made by taking out the Significant Nexus Test and anything related to Significant Nexus in the mini rule last summer, [the Corps’] final rule and interpretation of [their] authority under the Clean Water Act is still incorrect based on the plain reading of Sackett. We’re going to have a couple of rulings very soon, and we’ll hear whether the agencies are doing it correctly, at least in the eyes of those courts. And there may be further litigation over that. There may be appeals and all that sort of thing.

From the highest level, there’s still a lot of controversy about whether the agencies went far enough to recognize the limits of jurisdiction according to Sackett and we’ll hear about that. Then there are specific challenges. There was a property owner in North Carolina that filed a challenge based on enforcement action that said that the Army Corps is misinterpreting Sackett. I expect we’re going to see more of those because either a property owner says, “I don’t need you to tell me this is not Waters of the United States. It’s as plain as the nose on your face. I’m just going to go ahead. This is not connected to anything. This is isolated, or it could be ephemeral or there’s clearly nothing related to permanent waters. The waters aren’t permanent in any way. I’m just going to go ahead and do what I want to do.” And then it’ll be up to the agency to decide whether they’re going to enforce against a property owner in that situation. It’s not clear that they will, but things are going to come up that way.

ECOBOT: Do you think that rather than agency involvement happening ahead of time, the way it has historically, it’s going to shift agency action to enforcement? I mean, can you go so far as to say that that seems to be where things are bent?

WAGNER: It’s not a full-on trend yet, but I have heard enough from the sort of conservative legal foundation types, the industrial association types, where they see the Corps’ position as, “We’ll tell you when there’s a Water of the United States, that’s our call, and that’s a call only that could be made based on a jurisdictional determination.” One of the rationales of Sackett was that this kind of uncertainty is crazy. It’s expensive, it’s time consuming. That’s not fair for property owners out there to have to go through all that, just to find out if they could put up their home like the Sacketts wanted to do or something like that. So, my prediction is that it’s going to head in that direction, because I think a lot of property owners are going to say, “Look, I don’t need the blessing of the Corps and the EPA to say ‘no, we don’t have jurisdiction.’ We don’t have to prove the negative.” It could very well be that if EPA and the Corps feel that that’s been abused in some way, they may opt for an enforcement action.

Now, of course, all this is subject to whether there’s a change in administration and change in the agency. In that case I’d imagine there would be no enforcement, except in the most egregious cases, and deferring largely to the interpretations of private property owners. That’s a really big deal. One of the major implications of the upcoming election is in terms of how the agencies will interpret their role. If the team stays the same, they will work as hard as they can to press their authority in their jurisdiction as far as they can within limits. If the teams change, I don’t think it would be an exaggeration to say that I would be surprised if there was even one enforcement action over the next four years.

ECOBOT: Are the states restricted by Sackett from picking up that authority?

WAGNER: No, and that’s the thing. The states can always be more restrictive, and I think what we’re seeing is that a lot of the approaches, a lot of the strategy from EPA and the Corps is to work with the more sympathetic states, i.e. blue states, to say, “Hey, look, we may not be able to do this under Clean Water Act, but you may be able to do it under state authority . And so are there ways that you can go ahead and figure out if you want to protect certain waters”

There are some strange bedfellows out there. I think of the Louisianas of the world, which you might not expect to be one of the jurisdictions that would be more aggressive. On the other hand, they’re very protective for flood control and property protection. There may be surprises in terms of what states may or may not do.

ECOBOT: Just because of the personal interest, actual impact on their own backyard.

WAGNER: Exactly right. Some states may have to have a more aggressive posture, because they continue to suffer property loss or property damage, and they understand the importance of protecting these types of features.

ECOBOT: There’s nothing about Sackett that will prevent states from being as aggressive as they would like with protections, right?

WAGNER: My current view is that that is correct. Does the Federal Standard act in such a way that it precludes or preempts states from doing something different? I’d imagine you may see some arguments there from folks who want to challenge if a particular state does something that’s more restrictive. But if the state says that there are state waters or state features, or they pass legislation that says certain features need to be protected because of flood control or whatever, I believe they have that authority, and I don’t think Sackett prevents them.

We have this crazy quilt application of rules in the U.S. There are 27 states that apply the old rule [pre-2015 regulatory regime], and there are 23 that apply the new rule [2023 WOTUS rule that was amended following Sackett]. Stuff like that is going to continue. It’s never a good thing when you’re trying to come up with advice for companies or property owners that operate in different places, to have to tell our prospective clients, well, it may be good here, but tomorrow when you approach me for a project in a different state, I may have to tell you something very different.

ECOBOT: Do you have any predictions on what business response to that will be? States, businesses that are in multiple states, are they just going to follow the more conservative approach regarding protections and collect more data and say, look, we’re going to play it safe because we need a consistent corporate policy?

WAGNER: That’s a hard prediction to make. On the one hand, for years, the business community has wanted a standard to apply, and the back and forth drives them crazy. Well, now they have a standard. I think that the reason it’s hard to predict is that the posture of different businesses and different industries is not at all consistent. Some may continue to want to push the envelope to restrict jurisdiction and authority consistent with the Sackett ruling. Others may say, “Okay, I think we get it now. Let’s operate under this framework.” But it’s not a consistent approach. Some entities may push a little bit harder still and others may not. So that’s a hard prediction to make.

ECOBOT: You talked a little bit about some of the different cases that have been up in different states where landowners are no longer answering to federal agencies. Have you seen Sackett cited in any subsequent environmental cases? What kind of precedent has it set? Is this having sort of a ripple effect for other sorts of policies, whether related to WOTUS, or other environmental policies?

WAGNER: There was a ruling a few months ago that was very critical of the Army Corps, saying in essence that they had ignored Sackett. It was pretty much asking, “What is it going to take you guys? How hard do we have to beat you over the head before you really understand this?” But there haven’t been all that many yet. A year seems like a long time, but it takes a while for these challenges to percolate through the system to get some of these rulings.

ECOBOT: The Sackett decision has some finality that previous fluctuations of WOTUS didn’t have.

WAGNER: Yeah, this one’s going to be here for a while, and it’s going to take several years to see how courts deal with it, how litigation deals with it. It’s going to take the election outcome to determine how it’s going to be interpreted. And for the pendulum to swing back in favor of environmental protections, it may take another major disaster that shows the value of some of these lands and the importance of protecting them. But it’s not going to happen right away.

ECOBOT: So it’s the economic impacts of climate change that are the only way to unify the opposing sides on protection?

WAGNER:I think so. Hard lessons. If what the preservation and conservation community has been saying for years pans out, that the absence of protection of certain these lands results in worse disasters, worse flooding, other sorts of environment-damaging outcomes, that’s what it’s going to take. In the interim, [wetland protections] will be done on a state-by-state basis. Private entities and nonprofit groups are going to bear the brunt of trying to encourage this type of conservation. They simply won’t be able to count on federal protections and federal authority to do that. And then it’s going to take a while, either through court interpretations again, or through some current news events or natural occurrences, for people to try to move in a different direction.

Remember, one of the things that’s perpetuated this debate for decades is the uncertainty over the definition of the term “Waters of the United States.” Something that’s come out of Sackett and some of the other recent Supreme Court cases is the court’s instruction to Congress that if you want to be specific, you have to define it—you just can’t throw out a general term like WOTUS and then leave it to agencies to do it. You have to do more. It’s possible, one can envision, that with change of political fortunes, different parties controlling Congress and the White House in the future, that there could be the Wetlands Protection Act of 2028, that’s specific and fills in that gap. That doesn’t leave it to any doubt, and says, “These certain things need to be protected and here’s why. And we’re going to define it this way.”

If Biden wins and the agencies stay in the same control, you may see a much more aggressive posture to try to switch the standard, bring different challenges to try to get more clarity and so forth. But you’re not going to see any of that in the next six months. It’s too politically sensitive, but we’ll see soon enough.

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