June 7, 2023 — In an unfortunate sequence of events, the U.S. Supreme Court has issued a decision significantly limiting federal Clean Water Act regulation of wetlands just as the N.C. General Assembly has been moving legislation to limit state water quality protection for wetlands.
First, some background. Historically, states had the primary responsibility for protecting state waters from pollution. But in 1972, Congress adopted the Clean Water Act and asserted federal jurisdiction over “waters of the United States” to create a national water pollution control program. The U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) share responsibility for implementing the Clean Water Act. Jointly adopted EPA/Corps rules define “waters of the United States” and in doing so establish the scope of federal jurisdiction to enforce Clean Water Act permitting requirements for both the discharge of pollutants to waters and depositing fill material in waters.
Legal warfare over the “waters of the U.S.” definition has now raged for decades — in large part because of the convergence of two factors: 1. The EPA/Corps definition of “waters of the U.S.” included many wetlands; and 2. Section 404 of the Clean Water Act prohibits placing fill material in waters of the United States without a permit from the Corps. Given the definition of “waters of the U.S.”, Section 404 became a hurdle for development of some properties.
The Sackett Decision. After decades of lawsuits and several previous federal court decisions, the U.S. Supreme Court issued an opinion two weeks ago that greatly limits federal Clean Water Act jurisdiction over wetlands. The Supreme Court case, Sackett v. EPA, involved a Corps of Engineers enforcement action against an Idaho couple for filling wetlands without a Section 404 permit. The Corps determined that wetlands on the Sackett property — which were adjacent to a ditch that drained to a stream that flowed into a large lake — were “waters of the U.S.” that could not be filled without a permit.
The Sacketts challenged the Corps enforcement action and the U.S. Supreme Court ruled against the Corps jurisdictional determination. All nine justices agreed that the Sackett property fell outside the scope of “waters of the U.S.”, but the justices splintered on the legal basis for ruling in the Sacketts’ favor. A number of justices concluded that the Sackett property fell outside federal jurisdiction even under current EPA/Corps rules defining “waters of the U.S.” But a plurality of four justices issued an opinion striking down the current EPA/Corps jurisdiction rules entirely, finding the rules to be inconsistent with the intent of the Clean Water Act. The four justices ruled that the Clean Water Act extends:
to only those “wet-lands with a continuous surface connection to bodies that are ‘waters of the United States’ in their own right,” so that they are “indistinguishable” from those waters.
Sackett v. EPA, 598 U.S. _____ (2023) p. 27.
Under existing EPA/Corps rules, wetlands without a continuous surface connection to a body of water could still be “waters of the U.S.” as long as the wetland had a significant “nexus” to surface waters — such as a hydrological connection through groundwater. The sweeping decision by the four Supreme Court justices in Sackett means many of those wetlands will likely fall outside federal regulatory jurisdiction in the future. Wetlands separated from surface water by an artificial barrier such as a road or berm may also fall out of federal regulatory jurisdiction. The ruling has significant implications for North Carolina wetlands long assumed to be covered by the Clean Water Act — such as the pocosins (large freshwater swamps) in eastern North Carolina that may have only a groundwater connection to surface waters.
Back home. Before the Supreme Court issued the Sackett decision, the North Carolina Senate proposed legislation to limit state water quality regulation of wetlands to only those wetlands that fall under federal Clean Water Act jurisdiction. Senate Bill 582 ( North Carolina Farm Act of 2023) includes a provision that would prevent water quality rules that apply to “waters of the state” from applying to wetlands that are not “waters of the United States” regulated under the federal Clean Water Act:
SECTION 15.(c) Implementation. – Wetlands classified as waters of the State are restricted to waters of the United States as defined by 33 C.F.R. § 328.3 and 40 C.F.R. § 230.3. Wetlands do not include prior converted cropland as defined in the National Food Security Act Manual, Fifth Edition, which is hereby incorporated by reference, not including subsequent amendments and editions.
At the time Senate Bill 582 was introduced, the gap between federal wetlands jurisdiction and state wetlands jurisdiction was relatively small, but significant; the Sackett decision just made the gap much larger.
Senate Bill 582 has serious implications for wetlands falling out of federal jurisdiction (and the waters to which they connect). For example, state law requires a permit before anyone can
Cause or permit any waste, directly or indirectly, to be discharged to or in any manner intermixed with the waters of the State in violation of the water quality standards applicable to the assigned classifications or in violation of any effluent standards or limitations established for any point source, unless allowed as a condition of any permit, special order or other appropriate instrument issued or entered into by the Commission under the provisions of this Article.
G.S. 143-215.1 (a)(6). Under the Senate bill, that requirement would not apply to wetlands that fall outside federal regulatory jurisdiction because they would no longer be considered “waters of the state”. The result could be that unprotected wetlands will become conduits for water pollution to reach groundwater and surface water. Lack of any state or federal permit requirement may also result in the filling of wetlands that provide flood control and filter stormwater.
The issue for North Carolina.
The Supreme Court decision in Sackett only interpreted how the Clean Water Act defines the scope of federal jurisdiction over wetlands. The court did not find that wetlands outside federal jurisdiction do not require environmental protection and in fact stressed the role of states in protecting water quality.
The State of North Carolina — not Congress and not the U.S. Supreme Court — has the responsibility to protect North Carolina waters. In light of the Sackett decision, the state needs to decide whether and how to protect the water quality, ecological and flood control functions of wetlands that fall outside federal jurisdiction. The decision can’t be out-sourced to the federal government.
Cautionary notes.
The Sackett decision means EPA and the Corps will have to develop new guidelines for determining federal jurisdiction consistent with the court’s ruling. Past experience indicates that could take months; the Sackett rule will require guidance on interpretation and application to varying situations on the ground. In the meantime, it appears the Corps of Engineers has put jurisdictional determinations under Section 404 of the Clean Water Act on hold which will likely slow some development projects.
Other federal and state laws will continue to apply to activities impacting wetlands even if Section 404 permit requirements don’t. In the 1990s, a federal court struck down an EPA/Corps rule requiring a Section 404 permit for any activity (such as mechanized ditching) that could result in the incidental fallback of fill material into waters or wetlands. After the federal court struck down the “incidental fallback” rule, several North Carolina developers rushed to ditch and drain wetlands in the coastal area on the assumption that no Section 404 permit would be needed — only to find themselves on the wrong side of state Sedimentation Act enforcement actions.
For state policy makers, the breadth of the Sackett decision means the provision in Senate Bill 582 limiting state water quality protections for wetlands will have consequences that were likely not intended when the bill was introduced.