March 30, 2020

National Association of Manufacturers v. U.S. Department of Defense, Department of the Army Corps of Engineers, and U.S. Environmental Protection Agency, et al.

ENVIRONMENTAL LAW

WOTUS at the SCOTUS: Which Court Has Jurisdiction to Review Federal Agency Rulemaking Under the Clean Water Act?

CASE AT A GLANCE

Challenges to federal statutes (or agency action pursuant to federal statutes) typically begin in the federal district courts. The Clean Water Act (33 U.S.C. § 1251 et seq.) contains a judicial review provision—33 U.S.C. § 1369(b)(1)—stating that seven types of specific actions taken by a federal agency under the Clean Water Act are directly reviewable in the federal circuit courts of appeal, rather than in the federal district courts, thus cutting out one layer of litigation. The question in this case is whether challenges to the “WOTUS Rule” (waters of the United States)—jointly promulgated by the EPA and the Department of the Army (on behalf of the Army Corps of Engineers) (80 Fed. Reg. 37,054, June 29, 2015)—meet the requirements of Section 1369(b)(1). If the Court determines the Section 1369(b)(1) criteria are met, original and exclusive jurisdiction will lie in the federal circuit courts; otherwise, jurisdiction will lie initially in the federal district courts, with the potential for appellate review in the federal circuit courts.

Docket No. 16-299
Argument Date: October 11, 2017
From: The Sixth Circuit
by Amy Kullenberg
Ann Arbor, MI

ISSUE

Does the court of appeals have original jurisdiction under 33 U.S.C. § 1369(b)(1) over a petition for review challenging a regulation that defines the scope of the term “waters of the United States” in the Clean Water Act?

FACTS

Whether and when the Clean Water Act (CWA) applies to a given situation has been the subject of copious litigation. For example, Rapanos v. United States, 547 U.S. 715 (2006), addressed in great detail the meaning of the phrases “navigable waters” and “the waters of the United States” for purposes of determining what types of activities the CWA governs.

Following Rapanos, the Environmental Protection Agency (EPA) and the Department of the Army (on behalf of the Army Corps of Engineers, which partners with EPA to administer Clean Water Act permitting programs) engaged in rulemaking to develop a revised definition of the statutory term “waters of the United States” (WOTUS).

The proposed WOTUS Rule was initially published in April of 2014 (79 Fed. Reg. 22,188, April 21, 2014) but, following extensive political debate and controversy, was ultimately changed and reissued 14 months later as the Final Clean Water Rule: Definition of “Waters of the United States” (80 Fed. Reg. 37,054, June 29, 2015).

Hordes of suits challenging the Final WOTUS Rule were quickly filed in various federal district courts under the Administrative Procedures Act (APA)(5 U.S.C. § 500 et seq.). These suits challenged the WOTUS Rule from a multitude of perspectives—business and industry, state governments, and environmental advocates included. However, some litigants also filed “protective” suits challenging the Final WOTUS Rule in federal circuit courts, as well, invoking 33 U.S.C. § 1369(b)(1), which grants the circuit courts original and exclusive jurisdiction in specific situations. These various circuit court actions (from the Second, Fifth, Sixth, Eighth, Ninth, Tenth, Eleventh, and D.C. Circuits) were consolidated in the U.S. Court of Appeals for the Sixth Circuit by the Judicial Panel on Multi-District Litigation. However, the various district court suits, which had been (or would later be) filed, were not consolidated, leading to a chaotic situation where multiple district court suits were proceeding concurrently with the consolidated litigation in the Sixth Circuit.

The National Association of Manufacturers (NAM), petitioner in the current case before the Supreme Court, had joined in a coalition suit challenging the WOTUS Rule in federal district court under the APA; however, NAM purposefully did not join its coalition members in filing a protective suit in federal circuit court under Section 1369(b)(1). Instead, NAM successfully motioned to intervene in the Sixth Circuit consolidated action and then filed a motion to dismiss the circuit court actions based on lack of subject-matter jurisdiction. Many other litigants supported the dismissal of the circuit court actions, including several strange-bedfellow environmental organizations who had themselves taken this same two-pronged approach of filing suits in both district and circuit courts simultaneously.

The WOTUS Rule became effective on August 28, 2015; however, the Sixth Circuit issued a nationwide stay of the WOTUS Rule on October 9, 2015, pending resolution of the jurisdictional question.

In briefing and in oral argument, the parties agreed that there were only two possible bases for circuit court jurisdiction under Section 1369(b)(1): Sections 1369(b)(1)(E) or 1369(b)(1)(F).

After oral argument (held December 8, 2015) and considerable briefing, the Sixth Circuit issued its opinion on February 22, 2016, holding that the circuit court did have jurisdiction under Section 1369(b)(1)(F). See In re United States Department of Defense and United States Environmental Protection Agency Final Rule: Clean Water Rule: Definition of “Waters of the United States,” 80 Fed. Reg. 37,054 (June 29, 2015), 817 F. 3d 261 (2016), rehearing en banc denied April 21, 2016.

Although the Sixth Circuit held that the circuit courts do have jurisdiction to hear the various challenges to the WOTUS Rule, the three judges on the panel disagreed in their reasoning. Judge David McKeague found that circuit court jurisdiction existed under both Sections 1369(b)(1)(E) and 1369(b)(1)(F). Judge Richard Allen Griffin found that the criteria for circuit court jurisdiction under Section 1369(b)(1)(E) had not been met, but that, under the binding Sixth Circuit precedent of National Cotton Council of America v. U.S. E.P.A., 553 F.3d 927 (6th Cir. 2009), he was compelled to concur in Judge McKeague’s determination that circuit court jurisdiction was warranted under Section 1369(b)(1)(F). Judge Damon Keith, writing in dissent, found that neither (E) nor (F) conferred jurisdiction, agreeing with Judge Griffin’s analysis regarding (E) but stating that National Cotton was misinterpreted by Judge Griffin and therefore not binding in the present situation.

On July 1, 2016, Justice Elena Kagan extended the time to file petitions for certiorari to September 2, 2016; certiorari was granted on January 13, 2017. Although the Sixth Circuit had found jurisdiction under only Section 1369(b)(1)(F), the parties briefed jurisdiction under both Sections 1369(b)(1)(E) and 1369(b)(1) (F); therefore, the issue currently on appeal is whether either sub-section of Section 1369(b)(1) provides the circuit courts with jurisdiction to hear challenges to the WOTUS Rule.

CASE ANALYSIS

Section 1369(b)(1) identifies seven particular types of EPA actions that are directly reviewable in the United States Courts of Appeals: Sections 1369(b)(1)(A)–(G). This jurisdiction is treated as both original and exclusive. Decker v. Nw. Envtl. Def. Ctr., 133 S. Ct. 1326 (2013). Challenges to other types of agency action not specifically enumerated in Section 1369(b)(1) are typically brought in district court under the APA and may be brought within six years of the challenged agency action. 5 U.S.C. § 702, 5 U.S.C. § 704, 28 U.S.C. § 2401(a).

Of these seven categories delineated in Section 1369(b)(1), only two are relevant here: Sections 1369(b)(1)(E) and 1369(b)(1)(F).

33 U.S.C. § 1369(b)(1)(E) provides:

“Review of Administrator’s action…(E) in approving or promulgating any effluent limitation or other limitation under section 1311, 1312, 1316, or 1345 of this title… may be had by any interested person in the Circuit Court of Appeals of the United States for the Federal judicial district in which such person resides or transacts business which is directly affected by such action upon application by such person. Any such application shall be made within 120 days from the date of such determination, approval, promulgation, issuance or denial, or after such date only if such application is based solely on grounds which arose after such 120th day.”

33 U.S.C. § 1369(b)(1)(F) provides:

“Review of the Administrator’s action….(F) in issuing or denying any permit under section 1342 of this title… may be had by any interested person in the Circuit Court of Appeals of the United States for the Federal judicial district in which such person resides or transacts business which is directly affected by such action upon application by such person. Any such application shall be made within 120 days from the date of such determination, approval, promulgation, issuance or denial, or after such date only if such application is based solely on grounds which arose after such 120th day.”

The parties all acknowledge Section 1369(b)(1)’s 120-day application deadline as the impetus for the two-pronged filing approach taken by the majority of the litigants in these challenges. As the case law interpreting Section 1369(b)(1) contains some ambiguity, no party wanted to be in the unfortunate position of having filed a challenge to the WOTUS Rule in the wrong forum.

The jurisdiction conferred under Section 1369(b)(1)(E) is tied to the “effluent limitation” provisions found in 33 U.S.C. § 1311, § 1312, § 1316, and § 1345, which are commonly known as the “water quality” and “point source” provisions.

The jurisdiction conferred under Section 1369(b)(1)(F) is tied to the permitting processes described in 33 U.S.C. § 1342 (commonly known as the National Pollutant Discharge Elimination System (NPDES) program).

Although neither Section 1369(b)(1)(E) nor Section 1369(b)(1) (F) specifically identifies the promulgation of a rule as a basis for conferring circuit court jurisdiction, both invoke other statutory sections of the CWA, which, in turn, rely upon definitions of “navigable waters” and “waters of the United States.” Thus, one of the primary disputes in this case is whether to treat the statutory language found in Section 1369(b)(1)(E) and (F) on its “plain face,” or whether to interpret this language in a larger context.

Petitioner NAM argues that circuit court jurisdiction cannot lie under either (E) or (F) because, under a plain-language reading, the mere promulgation of a rule does not approve or promulgate a limitation under Sections 1311, 1312, 1316, or 1345, nor does it issue or deny a permit under Section 1342. NAM argues that the seven specific situations delineated in Section 1369(b)(1) should be treated as narrow exceptions to the general rule that judicial review of agency action begins in district court. NAM advocates for a close and restrained reading of Section 1369(b)(1), to preserve Congressional intent for limited direct circuit court review, provide jurisdictional clarity, and promote the benefits of multilateral judicial review in the district and circuit courts. NAM acknowledges that the WOTUS Rule applies to the scope of the CWA as a whole; however, NAM insists that the WOTUS Rule itself is not self-executing and must be applied in conjunction with some other portion(s) of the CWA. Therefore, the WOTUS Rule, on its own, cannot be properly classified—for jurisdictional purposes—as either a “limitation” or a “permit.”

The Federal Governmental Agency Respondents (the respondents) submit that federal circuit court jurisdiction applies in this case under both Section 1369(b)(1)(E) and Section 1369(b)(1)(F).

Regarding Section 1369(b)(1)(E), the respondents claim the WOTUS Rule was promulgated specifically with Sections 1311, 1312, 1316, and 1345 criteria in mind and that these sections cannot be implemented without reference to the definition of “navigable waters” provided by the WOTUS Rule. Therefore, the WOTUS Rule is a general parameter that guides the implementation of these specific discharge provisions and, therefore, constitutes the imposition of a type of “other limitation,” which can be challenged directly in the federal circuit courts. Furthermore, respondents maintain that the use of the word “any” in Section 1369(b)(1) (E) indicates Congressional intent to interpret the phrase “other limitation” broadly and that, where Congress has authorized direct court of appeals review of federal agency action, ambiguities as to the scope of that authorization should be resolved in favor of broader circuit court coverage. 

Regarding Section 1369(b)(1)(F), the respondents acknowledge that promulgation of the WOTUS Rule is distinct from the issuance or denial of a particular permit. However, respondents submit that the WOTUS Rule governs the scope of the entire CWA and therefore controls whether a permit is required in the first instance. Relying on Crown Simpson Pulp Co. v. Costle, 445 U.S. 193 (1980), for the proposition that actions that are “functionally similar” to the denial of a permit may be reviewed in circuit courts, the respondents here argue that since no permit can be issued or denied without reference to the WOTUS Rule, all challenges to the WOTUS Rule should be resolved comprehensively in the consolidated circuit court action, rather than piecemeal in disparate district court actions.

A consortium of nonprofit advocacy groups representing agricultural and commercial interests filed a respondent’s brief in support of petitioners (the Agrowstar respondents). The Agrowstar respondents advocate for a “plain meaning” approach to statutory interpretation and deny that any Supreme Court precedent has, to date, authorized a departure from this plain-meaning approach. In E.I. du Pont de Nemours & Co. v. Train, 430 U.S. 112 (1977), the Court decided that the EPA’s promulgation of industrywide regulations setting effluent limitations on both new and existing chemical manufacturers was cognizable in the federal circuit courts under Section 1369(b)(1)(E). The Agrowstar respondents seek to distinguish this ruling from the present facts by contrasting regulations that set effluent standards from rules that merely provide definitional scope. In Crown Simpson, the EPA had delegated NPDES permitting authority to California but retained and exercised the power to veto any permit that the EPA determined had been improperly issued. On direct challenge to the Ninth Circuit, the case was dismissed for lack of jurisdiction under both Section 1369(b) (1)(E) and (F). However, the Supreme Court held that the EPA’s veto was so “functionally similar” to a permit denial that jurisdiction under Section 1369(b)(1)(F) was cognizable. The Agrowstar respondents distinguish Crown Simpson on the basis that the EPA’s action in promulgating the WOTUS has not yet affected the issuance or denial of any actual permit.

In support of petitioner NAM, the Chamber of Commerce of the United States of America and several other business-related groups (the Chamber) filed an amicus brief. The Chamber argues that time-honored canons of statutory construction—such as expressio unius est exclusio alterius (the expression of one thing implies the exclusion of the other)—mandate that the seven specific provisions enumerated in Section 1369(b)(1) should be narrowly read and that suits challenging agency action should remain in district court unless one of the express provisions of Section 1369(b)(1) can be met.

Thirty states filed a brief as respondents in support of petitioner. The states echo the plain-language arguments provided by Agrowstar and the Chamber of Commerce concerning both Sections 1369(b)(1)(E) and (F). The states also advocate for a bright-line rule which easily distinguishes between cases that must be heard first in the federal district courts and those that may proceed directly to circuit court review. The states argue that courts and litigants alike would benefit from clear rules that would easily identify the proper forum in the first instance. The states warn that if Section 1369(b)(1) is interpreted in the manner proposed by the federal agencies, then there will be no end to confusing litigation, as exemplified by this case—where nearly all of the more than 100 litigants filed suits in both the federal district and the federal circuit courts simultaneously. Finally, the states suggest that the federal district courts provide the superior forum, in most instances, for the initial review of agency action and that the decision making in the circuit courts necessarily improves as competing perspectives percolate upward through the district court system.

The Utility Water Act Group (UWAG) filed a respondent’s brief in support of petitioner NAM, on behalf of a group of individual electric utilities and trade associations representing electric utilities. UWAG addresses harm that could be suffered by potentially regulated parties, if the WOTUS rule were to be categorized as eligible for direct circuit court review under Section 1369(b)(1). Specifically, UWAG cites the 120-day filing period (for applications to circuit court review under Section 1369(b)(1)) and contrasts this with the six-year filing period allowed for review in the federal district courts under the APA. UWAG argues that as circuit court jurisdiction under Section 1369(b)(1) is both original and exclusive, parties who may be regulated under WOTUS could unknowingly forfeit their right to judicial review of the Rule.

Perhaps the most interesting brief yet filed in support of petitioner NAM is by a consortium of respondent environmental groups, including Waterkeeper Alliance and the Sierra Club (the Waterkeeper group). The Waterkeeper group of respondents had, like many others, filed petitions objecting to the WOTUS Rule in both federal district and federal circuit court, seeking to preserve their ability to go forward in the appropriate forum, once that forum was determined by this litigation. However, while the Waterkeeper group and NAM challenge the substance of the WOTUS Rule itself on completely different grounds, the Waterkeeper group joins with NAM in locating review of the WOTUS Rule in the district courts. The Waterkeeper group discourages an interpretation of Section 1369(b)(1)(E) that would allow the WOTUS Rule to be treated as an “other limitation” under Sections 1311, 1312, 1316, or 1345. The group states that the WOTUS was promulgated pursuant to 33 U.S.C. §1361(a), which provides the EPA with its general rulemaking authority under the CWA and that Congress did not intend that rulemaking under Section 1361 could invoke direct circuit court jurisdiction under Section 1369(b)(1). Furthermore, the Waterkeeper group denies that jurisdiction applies under Section 1369(b)(1)(F), insisting that the promulgation of a rule does not constitute action taken on a permit under the NPDES. The group rejects the respondents’ “functionally similar” definitional scope argument, stating that Section 1369(b)(1)(F) references only Section 1342 and excludes Section 1362(7), which defines the term “navigable waters” as “the waters of the United States.” The Waterkeeper group also cites legislative history showing that various options for expanding circuit court jurisdiction under Section 1369(b)(1) (including adding a “catch-all” provision for any “final action taken” by the Administrator) had been proposed and debated but never implemented by Congress. 

As yet, only one brief, by the Natural Resources Defense Council and the National Wildlife Federation (NRDC), has been filed in support of the government respondents. NRDC supports both the Sixth Circuit result below and the result requested by the government respondents (EPA and Corps) in the current phase of litigation. NRDC criticizes NAM’s position as internally inconsistent—at the district court level NAM alleges sufficient harm to warrant a lawsuit; however, at the circuit court level NAM alleges that the WOTUS Rule is not a limitation within the court’s jurisdiction and has no direct effects on regulated entities at all. NRDC submits that the very arguments which NAM makes now to deny circuit court jurisdiction under Section 1369(b)(1) critically compromise the ability of NAM’s simultaneous claims to be decided in the federal district court.

SIGNIFICANCE 

This case is significant in two respects. First, it provides the Supreme Court with an opportunity to modify important precedent in this area. Second, the case will influence how the Clean Water Act is implemented going forward.

Regarding the first point, the outcome in the Sixth Circuit relied heavily on National Cotton Council of America v. EPA, 553 F.3d 927 (6th Cir. 2009). The Sixth Circuit’s decision was, effectively, a 1–1–1 split. Judge McKeague found circuit court jurisdiction under both Sections 1369(b)(1)(E) and 1369(b)(1)(F). Judge Griffin rejected circuit court jurisdiction under Section 1369(b) (1)(E) but begrudgingly acknowledged National Cotton as binding Sixth Circuit precedent and agreed that, under National Cotton, circuit court jurisdiction applied under Section 1369(b)(1)(F). In National Cotton, the Sixth Circuit held that Section 1369(b)(1)(F) authorizes direct circuit court review not only of actions issuing or denying particular permits, but also of regulations governing the issuance of permits. Under this rubric, challenges to the WOTUS Rule are eligible for direct circuit court review, because the WOTUS Rule determines where the CWA applies for permitting purposes. Although he acknowledged National Cotton as binding Sixth Circuit precedent, Judge Griffin steadfastly characterized National Cotton as wrongly decided, and he not-so-obliquely invites the Supreme Court to weigh in. Whether the National Cotton rule stands or falls may determine the fate of the actual WOTUS Rule being challenged here. This, in turn, will affect how the Clean Water Act applies to various activities in the real world. 

Secondly, the determination of which court—federal circuit or federal district—has jurisdiction to resolve the current challenges to the WOTUS Rule will have a very practical influence on how quickly and effectively Clean Water Act rules and regulations can be implemented in the future. Although challenges to environmental regulation are typically complex, the litigious weight of this case is extremely noteworthy. More than 100 different entities have filed more than two dozen different actions challenging the WOTUS Rule, on several and various grounds, in a multitude of different forums. At best, a determination on the merits of these challenges will not be made for months, if not years. A finding that jurisdiction for these challenges lies first with the district courts will necessarily add a layer of litigation and extend the time required for a final determination on the merits. A finding that jurisdiction lies with the Sixth Circuit should condense this time-frame considerably but may eclipse some opportunity for diverse and thorough advocacy. Either disposition will influence how the EPA and the Corps go forward with managing the practical implementation of the CWA.

CONCLUSION 

Geography is a shadow advocate in this case. Neither the federal circuit court nor the federal district court boundaries correspond with watershed delineations, and there is a tension in this case between the desire for local control and the desire for region-wide water policy.

All parties obliquely admit some preference for litigation in the district courts on CWA and environmental matters, as these courts are more closely situated with respect to local political pressure and to the realities of watershed hydrology. On the other hand, circuit-wide rulings are easier to manage, by both the regulator and the regulated party. This tension has contributed to the litigation strategies employed by all sides and may influence the Court’s decision in some fashion. 

The fact that the current administration has issued an Intention to Review and Rescind or Revise the Clean Water Rule (82 Fed. Reg. 12,532, March 6, 2017) and a newly proposed Rule defining the “Waters of the United States” (82 Fed. Reg. 34,899, July 27, 2017) is also notable, in terms of CWA efficacy. The Trump Administration had requested the Court place a hold on the current litigation to allow it an opportunity to review and revise the WOTUS Rule. This request was summarily denied by the Court. This may signal that the Court, once again fully constituted, is prepared to take the reins with regard to Clean Water Act jurisprudence.

PREVIEW of United States Supreme Court Cases

Amy Kullenberg is an attorney practicing in southeastern Michigan, with concentration in environmental, criminal, family, and Indian law. She can be reached at kullenberga@gmail.com. PREVIEW of United States Supreme Court Cases, pages 36–40. © 2017 American Bar Association

ATTORNEYS FOR THE PARTIES

  • For Petitioner National Association of Manufacturers (Timothy S. Bishop, 312.701.7829)
  • For the Federal Respondents (Jeffrey B. Wall, Solicitor General, 202.514.2217)

AMICUS BRIEFS

In Support of Petitioner

  • Chamber of Commerce of the United States of America, National Federation of Independent Business, State Chamber of Oklahoma, Tulsa Regional Chamber, and Portland Cement Association (William S. Consovoy, 703.243.9423)

Respondents in Support of Petitioner

  • Agrowstar, LLC; American Exploration & Mining Association; California Cattlemen’s Association; Coalition of Arizona/New Mexico Counties for Stable Economic Growth; Duarte Nursery, Inc.; Georgia Agribusiness Council, Inc.; Greater Atlanta Homebuilders Association, Inc.; Hawkes Company, Inc.; LPF Properties, LLC; New Mexico Cattlegrowers Association; New Mexico Federal Lands Council; New Mexico Wool Growers, Inc.; Oregon Cattlemen’s Association; Pierce Investment Company; R. W. Griffin Feed, Seed & Fertilizer, Inc.; Southeastern Legal Foundation, Inc.; and Washington Cattlemen’s Association (M. Reed Hopper, 916.419.7111)
  • State Respondents Ohio, Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, the New Mexico State Engineer, the New Mexico Environment Department, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, Wisconsin, and Wyoming (Eric E. Murphy, 614.466.8980)
  • Utility Water Act Group (Kristy A. Niehaus Bulleit, 202.955.1500)
  • Waterkeeper Alliance, Inc., Center for Biological Diversity, Center for Food Safety, Humboldt Baykeeper, Russian Riverkeeper, Monterey Coastkeeper, Snake River Waterkeeper, Inc., Upper Missouri Waterkeeper, Inc., Turtle Island Restoration Network, Inc., Sierra Club; and Puget Soundkeeper Alliance (Allison M. LaPlante, 503.768.6894)

In Support of Affirmance

  • Natural Resources Defense Council and National Wildlife Federation (Eric F. Citron, 202.362.0636) 40