The U.S. District Court for the District of Columbia has declared U.S. Environmental Protection Agency (EPA) regulations, defining the term “navigable waters,” arbitrary and capricious under the federal Administrative Procedure Act (APA). In American Petroleum Institute v. Johnson, 1:02-cv-02247-PLF (D.D.C. March 31, 2008), the court considered EPA regulations requiring oil-producing facilities to develop spill prevention and response plans for operations that may discharge into “navigable waters”—the key term defining the extent of federal regulatory authority under the Clean Water Act (CWA). These regulations, codified at 40 C.F.R. sec. 112, vaguely define “navigable waters” to include undefined “tributaries,” “adjacent wetlands,” and waters that “could affect” interstate commerce.
After finding that the industry plaintiffs had standing and their case ripe for judicial review, the court concluded that EPA “violated the APA by failing to provide a sufficiently clear, cogent, and reasoned explanation for its decision to promulgate such a broad definition of ‘navigable waters.’” Slip op. at 3. Industry argued that the expansive regulations were deficient because they failed to consider the U.S. Supreme Court’s decision in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC), which narrowed the extent of federal CWA authority. The oil spill regulations “cannot be regarded as a product of reasoned decisionmaking and must be set aside” because EPA never consider this seminal Supreme Court decision in its rulemaking proceedings. Slip op. at 23. While the Court recognized that the SWANCC decision did not establish “hard-and fast rules for determining which waters qualify as ‘navigable waters,’ it did establish that [CWA] jurisdiction is not co-extensive with Congress’ Commerce Clause authority.” Slip op. at 26-27.
While the case specifically concerns regulations regarding the petroleum industry, the same language appears in separate regulations adopted by EPA and the Corps regarding the development industry. Builders and developers are frequently required to obtain CWA permits from EPA and the Army Corps for discharges of storm water into “navigable waters,” or dredged material into federally-jurisdictional wetlands. A raging debate in the courts, the Executive Branch and Congress has brought the issue of the scope of federal permitting authority to the fore, and this opinion helps clarify that the U.S. Constitution sets meaningful limits, as defined by Supreme Court precedent, over those water features that must receive federal permits from the Corps and EPA. Indeed, proposals in Congress that seek to expand the scope of federal permitting authority may be curtailed by this decision, because bill language under consideration closely tracks the regulatory language that this court has now declared illegal. CWA practitioners will be closely watching this case to see if the federal government brings an appeal to the U.S. Court of Appeals for the D.C. Circuit.
