American water policy

The two words that rewrote American water policy

The strange tale of how a Supreme Court justice accidentally triggered the biggest new water rule in a decade.

By Annie Snider

When the Obama administration released its sweeping new wetlands rule in early summer 2015, it detonated across the American heartland like a bomb. Known by its nickname WOTUS, for Waters of the United States, the 75-page document laid out a new and ambitious definition of what streams, rivers and wetlands are within Washington’s mandate to protect—a change that could affect everyone from farmers to developers to oil and gas producers.

The fight began immediately and hasn’t let up since. Within hours of the rule appearing in the Federal Register, the first lawsuit hit. A week later there were more than a dozen, and today the more 150 litigants in nearly 40 separate suits are duking it out over which court should hear the challenges while an appellate court has put the rule on hold nationwide. The rule touched a particular nerve in farm country, where producers already feel overregulated by Washington, and among developers, who have to pay for expensive wetlands determinations and even more expensive mitigation schemes.

The battle over WOTUS is the latest, and perhaps the last, of the big fights over Obama’s late-term policy moves; it has already triggered endless coverage, analysis, and even a viral spoof music video from the Missouri Farm Bureau, mocking the government for trying to regulate dry ditches as waterways. Like the Clean Power Plan also released last summer, the rule can be seen as a classic power struggle between environmentalists trying to solidify protections and the industries—like agriculture, homebuilding and mining—who don't want their hands tied by out-of-touch greens.

But in another sense, the entire argument over WOTUS is a testament to the impact, and sometimes the randomness, of the U.S. Supreme Court. Behind the entire high-stakes battle are just two words, written by a single justice in 2006. The words were “significant nexus,” authored by Anthony Kennedy—the swing vote in a muddled 4-1-4 decision that forced the government to rethink how it polices water pollution. He suggested the government should limit itself to regulating waters that have a “significant nexus” with major waterways. And as definitive as those words sound, the real problem was—and still is—that nobody has ever known quite what they were supposed to mean.

LIKE MANY GOVERNMENT regulations, WOTUS was written to clear up a problem. When the powerful Clean Water Act was passed in 1972, it didn’t specify exactly which streams and wetlands it was meant to protect. The law names as its goal restoring “the nation’s waters,” and gives the government strict authority to regulate pollution into “navigable waters,” also called “Waters of the United States.” Of course, to clean up those big rivers, you also have to worry about the rivers and streams that flow into them.

But how far up into the tributary network should protections go? And where’s the line between land and water? Those basic questions have been the source of decades of legal brawls. For years, federal regulators had claimed broad authority over all kinds of wetlands, relying on odd legal rationales such as the possibility that a migratory bird might land in a remote wetland and then fly across state lines—something that EPA said justified regulation under the Constitution’s Commerce clause.

But as regulators stepped up enforcement, the protections—particularly those governing the filling in of wetlands—became a growing burden on businesses, restricting development and requiring companies to pay for expensive restoration projects to compensate for whatever impact they had on waters. Corporate interests along with property rights activists began taking the government to court, questioning whether Congress ever intended the Clean Water Act to be used as such a powerful lever.

A 5-4 Supreme Court ruling struck down the so-called Migratory Bird Rule in 2001, throwing protections for millions of acres of wetlands into question. And in 2006, a suit filed by Michigan developer John Rapanos challenging federal authority over patches of wetlands on his property also ended up in the Supreme Court—offering justices their biggest stab at the question of how far the Clean Water Act should reach.

The court was starkly divided. The right wing of the court thought the government had stretched the language of the law “beyond parody” by claiming authority over wetlands far flung from navigable waters. Those four justices, led by Antonin Scalia, argued that Clean Water Act protections should be carefully circumscribed, limited just to streams and wetlands that flow at least seasonally into navigable waters. The court’s liberal justices backed broad federal authority, arguing that federal agencies should be able to regulate any features through which water flows, including desert arroyos and other features that carry water only after rare rains. In the middle, as he often is, stood Anthony Kennedy.

Kennedy joined the conservative justices in ruling against the government, effectively ending the broad-brush approach and forcing Congress or the agencies that regulate water—the EPA and the Army Corps of Engineers—to write new rules. But what should they say? Kennedy wrote his own, stand-alone opinion that set a new test for when a wetland should be subject to federal regulation. In Kennedy’s view, wetlands should be covered by the Clean Water Act when they have a “significant nexus” with navigable waters. This meant that wetlands had to “significantly affect the chemical, physical, and biological integrity” of downstream rivers and seas in order to warrant protection, he wrote. Out were wetlands and creeks whose impact on downstream water quality was “speculative or insubstantial.”

The 4-1-4 Rapanos ruling turned the world of water law on its head. Lawyers pored over the decision, parsing each word and comma for meaning.

"It became kind of like the Bible,” said longtime water lawyer Jan Goldman-Carter, who directs the National Wildlife Federation’s wetlands and water resources program. “What is significant? The case is limited to wetlands, but there is language in there about tributaries—how much credence do we give this language? Which of these decisions carry the day in court?”

And like religious texts, its meaning lay largely in the eye of the beholder. As technical as “significant nexus” sounds, it’s not a scientific term. Questions of importance are inherently subjective, and Kennedy gave little guidance on where the line between "significant" and "insignificant" should be drawn.

The real-world consequence was mass confusion. Requests for on-the-ground determinations about whether individual streams or wetlands were covered piled up at the Army Corps of Engineers. Development projects stalled. Water pollution cases that had once looked like a slam-dunk got reversed on appeal because it was suddenly unclear what rivers were “significant” enough to be covered by the Clean Water Act.

It wasn’t until halfway through Barack Obama’s second term that the agencies finally got around to clearing up the mess. The job fell to officials at the EPA and the Army Corps, and they weren't coming to it unprepared: Water experts in the administration has known for years this was coming. They'd commissioned a science report about the complex flows of various pollutants through waterways, and had floated guidance on a potential approach late in Obama's first term. (The guidance had triggered its own blowback from opponents.) The formal regulation, first released as a draft in April 2014, was pegged squarely to Kennedy’s opinion: it used the phrase “significant nexus” no fewer than 288 times in 88 pages. It was expansive in its definition, declaring that all tributaries, no matter how small or how infrequently they flow, qualified for federal protection, as well as nearly all wetlands connected to the larger river system.

The backlash from opponents was swift and strong. Farm groups mocked the rule as declaring small irrigation ditches “navigable waters” and soggy patches of farm fields “wetlands.” In the Missouri attack video, a woman sings to the tune of the hit Disney kids’ song “Let It Go” while standing in a bone-dry ditch as her husband and children attempt to play in floaties and snorkels. The Farm Bureau’s “Ditch the Rule” campaign went viral. Farmers and property rights activists lit up their lawmakers’ switchboards and farm state Democrats felt enough pressure that at one point opponents appeared to be within reach of the 60 votes needed to kill the rule in the Senate.

After initially flubbing the rollout, EPA sprang into action. The agency scrapped the regulation’s legalistic name, rebranding it as the “Clean Water Rule,” and dispatched Administrator Gina McCarthy to Missouri to make an overture to farm country. The agency also launched its own slick social media campaign, parts of which a government watchdog later said violated an anti-lobbying law.

Ultimately, to salvage the effort the Obama administration made major concessions in its final version of the rule. EPA carved out loopholes for ditches and farmland, even though agriculture already has major permitting exemptions under the law, and set the first hard-line boundary for when a wetland or pond is too far from the tributary network to warrant federal protection.

The changes quelled concerns among enough lawmakers to save the rule from Congress, but it didn’t win over the rule’s staunchest opponents. And the challenges came from both sides—chiefly from industry groups, property rights activists and states, but also from some environmental groups, worried by leaked documents from Army Corps of Engineers experts that suggested the newly added loopholes could actually leave fewer waters protected than before.

AS CONFUSING AS the rule is, many lawyers think that the Obama administration's whole-hog focus on Kennedy’s two-word phrase could ultimately be the thing that saves the rule from challenges. Not only did officials write the rule to respond directly to Kennedy’s opinion, but they also tapped a whole new branch of science that cropped up in the wake of the 2006 case, aimed at answering Kennedy’s questions about connections between upstream and downstream waters. The Obama administration packaged much of the new work in a 408-page report meant to serve as a legal shield for the rule.

It could take years, but the issue is widely expected to end up at the Supreme Court again, once the tangled mess of lawsuits work their way through the process. And if it does, the rule’s careful attention to the “significant nexus” test—whatever it means—could be enough to protect it when it comes up for Kennedy's review.

“He’s really been served up a dish that he just can’t reject without looking foolish,” said Jamison Colburn, a professor at Penn State Law School.

But the real question now is whether Kennedy’s opinion will even matter by then. When Scalia died in February, the high court lost its most ardent critic of federal wetlands regulation—a man who once called the government "an enlightened despot" in its implementation of water regulations. As with so many other contentious issues, who takes Scalia’s seat on the bench will likely end up determining the water rule’s fate. And the past decade of jousting over water law will look like a decadelong linguistic contortion exercise inspired by one man in a black robe.