October 30, 2023. An earlier post described the interaction of new state limits on wetlands protection and a U.S. Supreme Court decision reducing federal Clean Water Act (CWA) jurisdiction over streams and wetlands. (See State Law: Removing Wetlands from “Waters of the State”.) This post provides an update on federal implementation of the Sackett decision and new information on the impact of the wetlands provision in the N.C. Farm Act (Senate Bill 582/ Session Law 2023-63).
Federal Implementation of the decision in Sackett v. EPA. In Sackett v. EPA, a plurality of four justices issued an opinion striking down rules adopted jointly by the U.S. EPA and the U.S. Army Corps of Engineers defining Clean Water Act jurisdiction over streams and wetlands. (The other five justices split between several dissenting opinions.)
In Sackett, the court held that “waters of the United States” — which defines the extent of Clean Water Act regulations — only applies to surface waters useful for interstate commerce (my shorthand description of the categories of waters listed more specifically below) and tributaries to those waters that are “relatively permanent, standing, or continuously flowing”. To be consistent with the Sackett decision, EPA has amended the CWA jurisdiction rule to limit federal jurisdiction over tributaries and wetlands. The Sackett standard appears to eliminate federal jurisdiction over ephemeral streams that flow only in response to precipitation. Jurisdiction over intermittent streams and other seasonal water bodies will likely require field interpretation of the Sackett criteria. Stay tuned for future litigation over those determinations. The restriction on CWA jurisdiction over tributaries has significant water quality implications. Nationally, an estimated 59% of streams would be classified as intermittent or ephemeral. The percentage is much higher (89%) in arid western states. Most of those streams ultimately flow into permanent water bodies.
In Sackett, the U.S. Supreme Court also interpreted the Clean Water Act to apply only to wetlands that have a continuous surface connection to water bodies otherwise in federal jurisdiction. Under the decision, wetlands must be physically “indistinguishable” from those waters to be covered by federal CWA jurisdiction. (Slip opinion, Sackett v. EPA, p. 27.) The new federal rule makes several changes in response to this restriction on federal wetlands jurisdiction:
1. The “significant nexus” standard, which had extended federal jurisdiction to wetlands with a significant water quality relationship to jurisdictional waters (such as a groundwater connection), has been removed from the rule.
2. Wetlands located near jurisdictional surface waters, but physically separated by a manmade structure (such as a berm), will no longer be considered jurisdictional based on being “adjacent” to waters of the United States.
3. The reference to ‘‘interstate wetlands’’ as a stand-alone category of jurisdictional wetlands has been removed.
Under the new federal jurisdiction rule that went into effect on September 12, 2023, the Clean Water Act will apply only to:
♦ Waters used or capable of being used in interstate or foreign commerce
♦ Tidal waters
♦ The territorial seas
♦ Interstate waters
♦ Impoundments of waters that are otherwise defined as waters of the United States (such as a reservoir created by damming a flowing river)
♦ Tributaries of the waters listed above as long as the tributaries are “relatively permanent, standing or continuously flowing”
♦ Wetlands that have a continuous surface connection to waters that fall into one of the categories above.
Filling jurisdictional waters or wetlands requires a federal permit under Section 404 of the CWA and most litigation over the definition of “waters of the United States” has been driven by property owners/developers seeking to fill wetlands for construction. But “waters of the United States” also defines the scope of Clean Water Act restrictions on water pollution. It is not entirely clear how the loss of jurisdiction over wetlands and non-permanent tributaries will affect the NPDES permitting program. There is earlier case law holding that discharge of pollutants to a non-jurisdictional stream or to groundwater with a surface water connection requires an NPDES permit if those pollutants will reach jurisdictional waters.
Scope of North Carolina Legislation Limiting Wetlands Protection.
The Sackett decision actually emphasizes language in the Clean Water Act that notes “the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution”. In limiting federal CWA jurisdiction, the court expressly deferred to broader state authority to protect waters and wetlands: “Regulation of land and water use lies at the core of traditional state authority”. (Slip opinion, Sackett v. EPA, p. 23). But just as the Sackett decision restricted federal water pollution authority in deference to the states, the N.C. General Assembly limited state water quality protections for wetlands to those falling in federal Clean Water Act jurisdiction.
Senate Bill 582 became state law on June 27, 2023 over the Governor’s veto. Confusion over the intended effect of the wetlands provision led me, as Chair of the N.C. Environmental Management Commission, to ask the Department of Environmental Quality (DEQ) to advise the EMC on implications for state water quality rules. In consultation with the Attorney General’s Office, DEQ confirmed that Session Law 2023-63 entirely eliminates state water quality protections for wetlands that fall outside federal regulatory jurisdiction, including basin wetlands and bogs that had previously been covered by a 2015 state wetlands permitting law. The DEQ memorandum also confirmed that the new law affects enforcement of state water quality standards restricting discharge of pollutants to wetlands.
Session Law 2023-63 does not affect application of state water quality standards to surface waters such as streams. Existing state laws requiring permits for discharge of pollutants and placement of fill material will continue to apply to streams and other surface waters in the state independent of CWA jurisdiction. The new federal jurisdiction rule will magnify the impact of Session Law 2023-63 on state wetlands, however. As noted above, federal jurisdiction over tributaries will shrink under the Sackett criteria. Consistent with the Sackett decision, the conforming EPA rule also removes CWA jurisdiction over wetlands adjacent to non-jurisdictional tributaries. Under Session Law 2023-63, those wetlands will also lose state water quality protections.
It is still unclear whether the General Assembly intended Senate Bill 582 to have such wide-ranging impact on state wetlands. The Sackett decision certainly expanded the impact of Senate Bill 582 beyond what would have been anticipated when the bill was filed. It is possible that Session Law 2023-63 will be modified as a result, but that seems unlikely to happen before adjournment of the 2023 legislative session. Other nearby states, including Virginia, have already take steps to ensure that state waters and wetlands that now fall outside Clean Water Act jurisdiction will be protected by state water quality laws.