Texas Court Finds that 2015 Clean Water Rule Violated APA

On May 28, 2019, the United States District Court for the Southern District of Texas determined that the EPA and U.S. Army Corps of Engineers violated the Administrative Procedure Act (APA) when they promulgated the final Clean Water Rule in 2015. This rule—frequently referred to as WOTUS because it defines “waters of the United States” subject to Clean Water Act jurisdiction—has been the subject of litigation since its inception. Rather than vacate the Rule, the Texas court sent it back to the agencies. The court also continued its September 12, 2018, injunction preventing the agencies from applying the Rule in Texas, Louisiana, and Mississippi.

Lawsuit

In State of Texas v. EPA, No. 3:15-CV-00162, the plaintiffs (including the states of Texas, Louisiana, and Mississippi, and a number of private groups such as American Farm Bureau) allege that the Rule violates (1) the APA, (2) the Clean Water Act, (3) the Commerce Clause, and (4) U.S. Const. Amend. X. The private plaintiffs sought summary judgment on these issues, and on May 28, the court entered its order finding that the Rule violated the APA. Because it found an APA violation, the court declined to address the other allegations at this time.

The Administrative Procedures Act

The APA requires agencies to publish general notices of proposed rulemakings in the Federal Register. Once notice has been issued, the agencies must allow interested persons an opportunity to comment on proposed rules. These notice-and-comment requirements are designed to ensure fairness and to assist in the substantive formation of administrative rules. Although a final rule can differ from a proposed rule (and it will), the final rule must be a “logical outgrowth” of the proposed rule. Otherwise, interested parties are not provided with fair notice and opportunity for comment.

Court Ruling

This is where the Texas court found that the agencies mis-stepped. When creating the final Rule, the agencies substituted distance-based criteria for ecologic and hydrologic criteria when defining “adjacent waters” that would be jurisdictional under the CWA. Under the proposed rule, “adjacent” was defined to include “bordering, contiguous or neighboring” waters. “Neighboring” waters included (1) “waters located within the riparian area or floodplain” of jurisdictional water or (2) waters with a “shallow subsurface hydrologic connection or confined surface hydrologic connection” to jurisdictional water.

The final Rule instead created a distance-based definition for “neighboring,” which includes:

• Waters located within 100 feet of the ordinary high water mark of navigable waters, interstate waters, territorial seas, impoundments, or tributaries   
• Waters located within the 100-year floodplain of navigable waters, interstate waters, territorial seas, impoundments, or tributaries and not more than 1,500 feet from the ordinary high water mark of such water
• Waters located within 1,500 feet of the high tide line of navigable waters or a territorial sea and all waters located within 1,500 feet of the ordinary high water mark of the Great Lakes

This change, the court reasoned, altered the jurisdictional scope of the CWA and changed the proposed rule in a way that interested parties could not have reasonably anticipated.  The court found that if interested parties had been notified of the change, the submitted comments and evidence would have been substantially different. Interested parties, the court stated, are not required to parse through vague references “like tea leaves” to discern an agency’s intent. The Rule, the court held, was not a logical outgrowth of the proposed rule. The court also found that the Rule violated the APA by preventing interested parties from commenting on the scientific studies that served as the technical basis for the Rule. In particular, the final “connectivity report,” which was instrumental to the agencies in determining what changes they should make to the definition of WOTUS, was released only after the comment period had closed. This report, written by EPA, reviewed peer-reviewed scientific literature to assess the connected nature of the nation’s waters.

Rule Sent Back to Agencies

After finding that the agencies had violated the APA in promulgating the rule, the court determined that remand, not vacatur, was the appropriate remedy. The court found that vacating the rule would be disruptive and that the agencies have already begun revise and repeal proceedings for the Rule.

What’s Ahead?

This court order does not alter the status quo. The order left in place the injunction applying to Texas, Louisiana, and Mississippi, but did not expand its scope. The court order also remanded the Rule to agencies that are working hard to replace it. A new proposed rule was released December 11, 2018, and published February 14, 2019. The public comment period closed April 15. A new final rule could issue within the year. In the meantime, the Rule remains in effect for 23 states.[i] The others, including Iowa, are subject to pre-2015 regulations and guidance. And litigation continues throughout the country.