Recent Supreme Court Decision on Sackett v. EPA and What it Means to Dairy Producers

The recent decision by the U.S. Supreme Court on a case involving the Waters of the U.S. (WOTUS) under the Clean Water Act was no ordinary decision by the Justices. The Supreme Court’s job is to interrupt federal and state laws and regulations that are brought before it for review and to issue opinions. The Sackett v. EPA case has been tied up in the court system since 2012 which gives you a good idea how slow our judicial process works. The case involved a couple in a western state who were trying to build a home but were thwarted by the federal bureaucracy—-specifically the Environmental Protection Agency (EPA) and the Army Corps of Engineers. At issue according to the two Agencies was that the home building site was a wetland and therefore subject to federal regulation under the 404 permitting process required by the Clean Water Act.

So, what does this have to do with agriculture and in particular dairy farming?  Good question!  Well, as you read this article you will see—hopefully—that it has a great deal to do with agriculture and producer’s ability to cultivate their cropland, maintain ditches and farm ponds, planting crops near wetlands and do other farm related cropping practices. The importance of this decision is its effect on future federal jurisdictional authority by EPA and the Corps on the permitting process previously discussed. Violating this federal authority could result in fines and other enforcement by the Army Corps and EPA as well as lawsuits from various environmental organizations.

The issue is complicated as you will see. I will do my best to explain it in a way that makes sense and at the same time where we stand today following this decision by the Court. Not only does it involve the Court, but it also has a regulatory track record of three Administrations who published WOTUS Rules as their attempt to clarify the authority of the Agencies in the permitting process. The central issue here is the matter of “wetlands” and their adjacency to “navigable waters” which are used for commerce. It already starts to sound complicated but let’s sort it out.

Background Leading up to the Court Decision

Many of us who have followed the WOTUS issue for the past several years were surprised that the Supreme Court agreed to take the Sackett v, EPA case. It was only about building a home and EPA and the Corps that the couple were building it on a wetland near a lake and therefore needed a 404 permit. Everyone wondered how far the Court would go in defining the authority of the two federal agencies to regulate wetlands under WOTUS. We were very surprised by the Court’s decision.

However, before we go any further let’s step back to see where we were before this recent decision. In 2006 the Supreme Court under the Rapanos case had difficulty in how much authority EPA had over wetlands under the Clean Water Act which includes WOTUS. They came up with two opinions that involved “two tests” that constitutes Waters of the U.S. under the Clean Water Act!

Test 1—The Relatively Permanent Test:  This test concluded that in order to be classified as a WOTUS  wetland, it must have a continuous surface connection with a river or lake or an ocean which is a traditional “interstate navigable water” that are directly adjacent and indistinguishable—meaning impossible to differentiate or tell apart from those waters. That seems fairly clear.

Test 2—-The Significant Nexus Test:  Now this term is as clear as mud if you will pardon my pun. What does Significant Nexus Test mean?  Nexus means connection or link. As the federal agencies (Corps and EPA) looked at these two opinions they all tended to follow the Significant Nexus Test as their jurisdictional guidance in determining whether or not a wetland is covered under the permitting process by the two agencies. The agencies expanded their regulatory authority to cover farm ditches that often are dry six months or more during the year, farm ponds and even water standing in a farm field after a heavy rain or snow melt for a few days.

This has caused much confusion in the agriculture community and has resulted in farmers not knowing what to do in a number of cases when cultivating their land near wetlands. They have appealed to Congress to act with legislation and clarify this matter but of course that has not happened.

Federal Regulations:  The Obama, Trump and Biden Administrations have all written WOTUS Rules with varying results and disappointment in many cases. Both the Obama and Biden Administrations attempted to clarify WOTUS with federal Rules that in most farmers view were not satisfactory and gave the federal agencies more authority to regulate wetlands near cropland. The Trump Administration voided to Obama Administration Rules and rewrote their own which were more farmer friendly. The Biden Administration voided the Trump Administrations Rules and recently published their own. However, the farming community was not pleased with them at all. Lawsuits have been filed by the farming community and environmental organizations on each of the three past Rules. So we have seen a steady stream of litigation plus confusion and the agencies in many cases requiring permitting on a case by case basis.

The Supreme Court’s Recent Decision

The Sackett v. EPA decision by the Supreme Court was a clear victory for land owners. It in affect did away with the Significant Nexus Test which EPA and the Corps have been using to expand their regulatory reach to require 404 permitting on many wetland cases that it believed were violating the WOTUS requirements under the Clean Water Act. Farm ditches and standing water in farm fields that were dry much if not most of the year will no longer be subject to the WOTUS Significant Nexus Test as well as small ephemeral seasonal tributaries that are dry much of the year next to fields that are cropped.

So this is very good news. However, the Court did not deal specifically with the adjacent issue of wetlands in terms of abutting or ‘neighboring” navigable waters. A second opinion by the Justices said the adjacent issue should be interrupted broadly meaning that it need not be adjoining but “close to” or lying near” in referring to wetlands. This opinion would give no limiting principle to federal authority on this matter.

So in essence we have got rid of the Significant Nexus Test but still have confusion over what adjacency means. Also, keep in mind that all States have the right to regulate land and water within their jurisdictions and that this Supreme Court decision does not change that. They can have stiffer penalties than the federal agencies have attempted to impose or lessor ones. In addition ground water is not covered under WOTUS.

Next Steps

The Court’s decision means that the Biden Administrations current WOTUS Rule will have to be withdrawn and rewritten—which is also very good news. However, expect EPA and the Corps to try and either slow walk the process as much as possible and at the same time try and write a new Rule that will give them as much regulatory authority on wetlands through the WOTUS law as possible and still survive any future litigation. Meanwhile the Corps of Engineers has said they will pause for the time being in making any decisions on permitting under the 404 process as a result of the recent Court decision. This of course adds to the confusion as we move forward. Except for the clarity on the Significant Nexus matter which is extremely beneficial to dairy producers and other producers we remain in a somewhat limbo status for the time being. Congress should act but given the current partisanship on the Hill I wouldn’t count on it. The current Administration will write a new Rule which will likely be litigated immediately. However the lower courts are still active on this issue! Read on!

Status of Pending Litigation

The District Courts in the States of Texas and North Dakota have enjoined the implementation of the Biden Administration’s which covers 25 States in the mid-west and several states in the Southeast from South Carolina to Florida as well as Virginia. The State of Kentucky has also done the same so at least 26 states have moved to stop the WOTUS Rule. We will see how this plays out in the litigation appeals process.

Summary

Prior to the recent Supreme Court, we had a situation in which EPA and the Army Corps had enormous regulatory authority over wetlands regarding the permitting process under the Clean Water Act involving Waters of the U.S.

The two Agencies had taken the opportunity to expand their jurisdiction based on an opinion issued by the Supreme Court in 2006. At issue has always been the question as to how much authority do federal agencies have on regulatory matters without having Congressional legislative authority to back up their actions.

Their position on WOTUS resulted in a significant lack of clarity in the agriculture community on the issue of wetlands and in particular the definition of “navigable waters” and how the connection between these issues impacted their cropping and maintenance of ditches and other farming practices.

Because our producers crop more than 320 million acres of land in the U.S. their agricultural businesses are impacted more than any other industry in the nation.

The Sackett v. EPA decision by the Supreme Court was an important victory for landowners. It clarified the so called “Significant Nexus Test” by invalidating it. Ditches, farm ponds, small tributaries and other related water bodies that are dry much of the year will no longer be subject to the 404 permitting process.

What the Court did not come to grips with is the “adjacency” issue meaning a clear definition of how near a neighboring or close a wetland is to a navigable water. This needs to be further clarified.

The Biden Administration’s WOTUS Rule which was recently published will have to be withdrawn and rewritten. Good news!

There is other pending litigation in 26 States that has enjoined the latest WOTUS Rule from being implemented as well.

So a major battle has been won—but the War goes on!