WASHINGTON, D.C. — The U.S. Supreme Court has released its decision on Sackett v. EPA, a case focused on the definition of the “waters of the United States” (WOTUS). The court unanimously ruled on May 25 that the federal jurisdiction under the Clean Water Act (CWA) extends only to wetlands that are “indistinguishable” from larger bodies of water by having a “continuous surface connection.” The decision narrows the reach of federal CWA protections and could have a major impact on a variety of industries, including commercial real estate.
On June 1, 2022, EPA Administrator Michael Regan signed a rule to redefine the WOTUS rule. This would expand the EPA and the Department of the Army’s regulatory oversight to include traditionally navigable waters, territorial seas and interstate waters, as well as resources that significantly affect those waters. According to the EPA and the Department of the Army, the revised rule is based on definitions that were in place before 2015.
The Supreme Court’s decision does not explicitly address the validity of the new WOTUS rule — which took effect on March 20 — but does have significant implications for the implementation and enforcement of federal water regulations. Justice Samuel Alito stated in his Majority Opinion that the EPA’s interpretation of its powers went “too far.”
The National Multifamily Housing Council (NMHC) and National Apartment Association (NAA) commended the Supreme Court’s decision as a win for the apartment industry.
“Today’s decision provides long-awaited certainty for property owners and housing providers and properly curbs federal overreach of what defines WOTUS,” reads NMHC and NAA’s joint statement. “The apartment industry strongly supports protecting our water resources, but undue and confusing regulations would exacerbate our nationwide housing affordability crisis.”
The National Association of Home Builders (NAHB) also commented on the matter, calling for further action from the government to further define the WOTUS rule.
“It’s time for the Biden administration to implement a new durable and practical definition of WOTUS that will truly protect our nation’s water resources without infringing on states’ rights and triggering additional expensive, time-consuming permitting and regulatory requirements,” stated NAHB chairman Alicia Huey.
The National Multifamily Housing Council (NMHC) also recently joined 16 other housing, infrastructure and agricultural organizations in filing suit to challenge the new rule. The suit was filed on Jan. 18 to the Galveston Division of the U.S. District Court in the Southern District of Texas. The lawsuit challenges the legality of the revised WOTUS rule and states that the rule imposes “impossible — and unpredictable — burdens on landowners, users, and purchasers,” requiring them to assess not only their own land, but also land beyond their own holdings.
The suit argues that the WOTUS rule should be considered unlawful under the Administrative Procedure Act, which stipulates the ways in which federal agencies may establish and enforce regulations. The plaintiffs argue that the revision adopts “an unworkable definition of WOTUS that conflicts with the CWA, the Constitution, and Supreme Court precedent,” and “effectively reads the term “navigable waters” out of the CWA.”
According to the lawsuit, the plaintiffs are requesting that the court declare the revised WOTUS rule unlawful, enter an order vacating the rule and prohibit the EPA and the Army from implementing and enforcing the revised rule. A timeline for the lawsuit has yet to be announced.