Tenth Circuit Lifts Stay of Navigable Waters Protection Rule in Colorado

On March 2, 2021, the United States Court of Appeals for the Tenth Circuit determined that the district court abused its discretion when it granted the State of Colorado’s request to stay the effective date of the Navigable Waters Protection Rule in Colorado. The district court had granted the preliminary injunction, pending a determination on the merits of Colorado’s case challenging the legality of the rule. In reversing and vacating the district court’s decision, the court ruled that Colorado was not entitled to a preliminary injunction because it did not show it would suffer irreparable injury if the rule went into effect.

Background

The Clean Water Act (CWA) prohibits the discharge of pollutants without a permit into navigable waters. Navigable waters are defined as “waters of the United States [WOTUS], including the territorial seas”. 33 U.S.C. § 1362. The CWA contains two permitting schemes to allow the discharge of pollutants into WOTUS. Section 402 permits allow the discharge of pollutants other than dredge and fill material. 33 U.S.C. § 1342. Section 404 permits allow discharge of dredged and fill material into navigable waters. 33 U.S.C. § 1344.

The Environmental Protection Agency (EPA) handles Section 402 permits and the Army Corps of Engineers (the Corps) generally handles Section 404 permits, although the EPA shares some responsibility for the Section 404 program as well. Under the CWA, states may choose to manage their own permitting schemes. 33 U.S.C. §§ 1342(b), 1344(g). Many states have chosen to enforce their own Section 402 permitting programs, but only two states have chosen to operate their own Section 404 programs. The EPA oversees any state-enforced permitting system.

The CWA imposes criminal liability and civil fines for failure to comply with either of these programs. 33 U.S.C. § 1319(c), (d). However, the CWA does not provide a definition of WOTUS. The duty to define WOTUS is delegated to the EPA and the Corps.

On April 21, 2020, the agencies published the Navigable Waters Protection Rule (NWPR) defining WOTUS. 85 Fed. Reg. 22,250. The NWPR narrows the scope of waters which qualify under the CWA to four categories: (1) territorial seas and navigable waters used or previously used in interstate or foreign commerce; (2) tributaries; (3) lakes, ponds, and impoundments of jurisdictional waters; (4) and adjacent wetlands.

Colorado law prohibits any discharge of pollutants into state waters. Colo. Rev. Stat. § 25-8-501(1). With some minor exceptions, Colorado defines state waters as “any and all surface and subsurface waters which are contained in or flow in or through this state”. Id. at § 25-8-103(19). Colorado administers its own Section 402 permitting program but has chosen to use the Corps’ Section 404 program to authorize dredge and fill activities into WOTUS. The NWPR narrows which waters require a Section 404 permit in Colorado. These “disputed waters”—that is the waters protected under Colorado law but not the NWPR—are at the center of the case.

Court Action

In May 2020, Colorado filed this federal lawsuit claiming that the Agencies violated the Administrative Procedures Act in enacting the NWPR because the rule (1) is not in accordance with law, (2) is arbitrary and capricious, and (3) suffers from procedural flaws. Colorado also asserted in its action that the Corps violated the National Environmental Protection Act because it promulgated the NWPR without preparing an Environmental Impact Statement. Colorado requested a preliminary injunction to stay the NWPR’s effective date and prohibit the Agencies from enforcing the NWPR, pending a decision on the merits.

On June 19, 2020, three days before the NWPR was scheduled to take effect, the district court stayed the effective date of the rule and instructed the Agencies to continue administering Section 404 of the Clean Water Act in Colorado under the then-current regulations. The district court found that Colorado would be irreparably harmed by the NWPR because the state would be forced to undertake additional enforcement action to protect the disputed waters.

Preliminary Injunctive Relief

The Agencies sought review of the district court’s decision before the Tenth Circuit Court of Appeals. In their appeal, the Agencies claimed that Colorado did not show sufficient evidence that the alleged enforcement burden would cause irreparable harm. Such a showing must be made before the court will consider the other factors necessary to grant an injunction. See New Mexico Dep't of Game & Fish v. United States Dep't of the Interior, 854 F.3d 1236, 1249 (10th Cir. 2017). The harm must be imminent, certain, actual, and not speculative. Id. at 1250.

The court explained that to obtain a preliminary injunction, a proponent must show that (1) he is likely to succeed on the merits, (2) he will suffer irreparable harm without an injunction, (3) the proponent’s threat of injury outweighs the injury caused by the injunction to the opposing party, and (4) an injunction is not contrary to the public interest. See Winter v. NRDC, 555 U.S. 7, 20 (2008). These four factors are also used to determine whether an agency action can be stayed.

To support its claim of harm due to an increased enforcement burden, Colorado offered a declaration from the Clean Water Program Manager for Colorado’s Water Quality Control Division. The manager claimed that the state would need to take enforcement actions against 404 permit violations due to the NWPR’s narrowing of qualified waters. She also stated that Colorado could not afford this without diverting funds from other needed clean water programs.

At trial, Colorado also offered evidence that the EPA has historically completed three to five enforcement actions per year for Section 404 permit violations in the state. The district court found that “[a]t least some” of the enforcement actions took place in disputed waters and that Colorado would now have to assume that enforcement burden.

In evaluating Colorado’s arguments, the Tenth Circuit noted that allegations are not enough to warrant preliminary injunctive relief. The party seeking the extraordinary remedy faces a high bar—it must make a clear and unequivocal showing it will likely suffer irreparable harm absent preliminary relief. After reviewing the evidence, the court ruled that the district court had abused its discretion by finding that Colorado met this high burden.

Despite the manager’s testimony, Colorado presented no evidence of when the alleged harm would occur, only vague assertions that there would be an enforcement burden in the future. Additionally, while the EPA has undertaken Section 404 enforcement actions in the past, Colorado did not provide details of the actions or whether the violations actually occurred in disputed waters. The court found there was no evidence showing a causal connection between the NWPR and an increase in Colorado’s enforcement burden. The evidence did not establish that harm was imminent, actual, or certain. As such, the court ruled that the district court abused its discretion by engaging in “pure speculation.”   

Colorado’s Alternative Arguments

Although the district court had granted a preliminary injunction, it did reject one of Colorado’s asserted grounds for relief. On appeal, Colorado asked the Tenth Circuit to uphold the preliminary injunction based upon the argument that the district court had rejected. At trial, Colorado had claimed that the NWPR would leave half of its waters unprotected and cause substantial environmental harm due to illegal dredging and filling activities. The district court found that “Colorado's alleged chain of causation between the [NWPR] and the damage to state waters is pure speculation.”

In rejecting this alternative argument, the Tenth Circuit agreed that the argument was not supported by the evidence. Accordingly, the Court declined Colorado’s invitation to affirm the district court’s order based on this alternative claim of irreparable injury.