On September 8, 2023, EPA and the U.S. Army Corps of Engineers published a final rule narrowing the scope of “waters of the United States” (WOTUS) under the Clean Water Act (CWA) such that certain wetlands are removed from federal jurisdiction. The final rule revises the agency regulations in light of the U.S. Supreme Court holding in its recent landmark decision, Sackett v. EPA. However, the final rule does not clarify some phrases and terms used in the Sackett decision, leaving room for agency discretion and ambiguity in various permitting scenarios.

In line with the Sackett holding, the final rule removes the “significant nexus standard” for wetlands from the agency regulations and amends the definition of “adjacent.”Prior to Sackett, federal jurisdiction attached where there was a significant nexus between wetlands and adjacent non-navigable waters, and “adjacent” was defined to mean “bordering, contiguous, or neighboring.” The Sackett ruling rejected this test as inconsistent with the text of the CWA and held that CWA authority only extends to wetlands that are “as a practical matter indistinguishable from waters of the United States” — which requires a showing that (1) the adjacent body of water is a “relatively permanent body of water connected to traditional interstate navigable waters” and (2) the wetland has “a continuous surface connection with that water, making it difficult to determine where the water ends and the wetland begins.” The new final rule removes all regulatory language providing for the significant nexus test and redefines “adjacent” to mean “having a continuous surface connection.” The new rule additionally removes “interstate wetlands” from regulation in accordance with Sackett.

As a result of the final rule, jurisdictional waters are now: traditional navigable waters; territorial seas; interstate waters; impoundments of WOTUS; tributaries of the aforementioned waters that are relatively permanent, standing or continuously flowing bodies of water; wetlands having a continuous surface connection to WOTUS, and intrastate lakes and ponds, streams, or wetlands that are relatively permanent, standing or continuously flowing bodies of water with a continuous surface connection to navigable waters, territorial seas, or interstate waters.[1] Whereas the agencies formerly had jurisdiction over ephemeral and intermittent streams and headwaters that had an ecological connection to larger water bodies and over wetlands neighboring waters of the U.S. but separated by berms and dikes, these waters will largely no longer be federally regulated.

The final rule does not incorporate or clarify certain language from the Sackett decision. For instance, the rule does not incorporate language specifying that “the CWA extends to only those wetlands that are as a practical matter indistinguishable from waters of the United States” and that a “continuous surface connection” means that “it [is] difficult to determine where the water ends and the wetland begins.” The final rule additionally does not clarify the phrase “relatively permanent” in the rule, signaling that such decisions will likely be made on a case-by-case basis by the local Army Corps district. The agencies state that they will interpret issues that arise under this definition of WOTUS in keeping with the Sackett decision through the issuance of further guidance and training materials and by making final jurisdictional determinations and permitting that are subject to judicial review.

While the new WOTUS rule inevitably means that fewer CWA permits will be required nationwide, it remains to be seen whether and to what extent states will step in to fill this regulatory role. For example, in Louisiana, the Department of Natural Resources’ Office of Coastal Management (OCM) regulates activities that occur in wetlands when they would have a significant impact on coastal resources and coastal waters of the state. Accordingly, OCM may take on an increased role in the Louisiana Coastal Zone where the Corps no longer has jurisdiction over certain wetlands, but Louisiana would need to undertake legislative action to expand OCM’s authority in noncoastal areas. With a decrease in federal jurisdiction, the demand for wetlands mitigation credits and thus mitigation banking may also decline, and as a result one of the mechanisms for achieving the U.S. policy of “no net loss” of wetlands will likely also be limited.   

The final rule is effective today, immediately upon its publication in the Federal Register. The agencies have not indicated whether projects addressed under prior WOTUS definitions will be affected or may be revisited. Despite the agencies issuing the final rule, questions regarding the nuances of its application remain to be addressed via agency guidance and practice. EPA and Army Corps intend to hold webinars on September 12, 13, and 20, 2023 to discuss the updated WOTUS rule, and the recording will be posted on EPA’s website, https://www.epa.gov/wotus.

[1] The WOTUS definition is subject to certain listed exceptions.

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