One of the most vexing environmental law issues of the last three decades is the scope of the term "waters of the United States" (WOTUS) in the Clean Water Act — and what marshes, lakes, and streams fall under its purview. A connected legal question stretching back even further is how much deference to give agencies in policymaking and legal interpretations.
These issues are present in both the Trump administration's final "Waters of the United States" rule, which narrowly defines waters subject to the act, and the Biden administration's likely attempt to expand that definition. The Trump administration's narrow approach dramatically reduces the number of waterways under federal protection. A broader definition would restore and possibly expand protections to better safeguard public and environmental health.
A new study on the economic analyses in the Trump rule (which I co-authored) concludes that its supporting economic analyses rely on questionable assumptions that are unsupported by evidence. The External Environmental Economics Advisory Committee (E-EEAC), an independent organization that provides information to the EPA, commissioned the study.
Our courts have been grappling with what "waters" Congress intended to include under the regulatory purview of the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers ever since passage of the Clean Water Act in 1972.
While the term "waters of the United States" seems very broad (does it include the glass of water in my hand?), the answer to this question is entwined with a deeper constitutional one: What waters can the federal government regulate under the Constitution's Commerce Clause, and what fall under states' exclusive regulatory purview?
The U.S. Supreme Court has attempted — without clarification from Congress — to answer this question several times over the last half century. The Court's last on-point ruling came in a splintered opinion in 2006, when it offered three different rationales to define the extent of WOTUS in Rapanos v. United States.
In 2015, the Obama administration attempted to clarify the definition with a rule that classified U.S. waters based on their "significant nexus" to interstate waters, echoing the approach taken by Justice Anthony Kennedy's controlling concurrence in Rapanos. This rule was challenged in multiple jurisdictions and suspended in much of the country.
In February 2017, the Trump administration announced it planned to repeal Obama's Clean Water Rule, and, in July of that year, the EPA and the Army Corps announced a two-step process by which it would repeal and replace it.
The final rule took effect last month. It shrank federal jurisdiction over U.S. waters, especially over isolated wetlands and "ephemeral" streams (dry stream beds that fill and flow after rainfall) — ostensibly consistent with Justice Antonin Scalia's Rapanos plurality opinion.
The incoming Biden administration has signaled that it wishes to jettison this rule and restore the Obama-era definition. When a federal agency seeks to alter a prior rule with a different substantive standard, administrative law requires the agency to provide a reasonable rationale for the change.
While there are numerous legitimate reasons to revert to the prior definition, the new study provides a significant one, specifically that the Trump rule is based on a faulty economic analysis. In analyzing the costs and benefits of the rule, the Trump rulemaking assumes that waters newly excised from the federal definition could likely still be covered by state regulation. This assumption is critical in the rulemaking's conclusion that it would likely have net economic benefits.
However, our study undercuts this determination, noting that there are several questionable decisions and assumptions in the economic analyses supporting this conclusion. The Trump rule's economic analyses simply assume that if they have the authority, many states will begin regulating waters that are newly deprived of federal jurisdiction. This, of course, is impossible to predict. What's more, the economic analyses' underlying assumptions about a state's legal authority to easily assert jurisdiction are incorrect.
Our study's analysis of laws governing states' powers to adopt new environmental laws or regulations diverged from the Trump administration's conclusions. As my colleagues and I note in our report, "[b]ased on a state-by-state review, we show that the agencies were more optimistic than the data would justify."
The Biden administration will have its hands full in reversing environmental damage done by the Trump administration's policies. The Trump Waters of the United States rule is among the most important — and most damaging. Our new report provides a substantial basis to repeal that rulemaking and restore federal protections to U.S. waterways. The health of the public, and the planet, depends on it.