New Supreme Court Decision Limits Federal Reach over Wet Areas

In a long-awaited decision on May 25, the U.S. Supreme Court unanimously decided in favor of landowners on a case (Sackett v. U.S. Environmental Protection Agency) that hinges on federal limits over waters and wet areas. AGC submitted a friend of the court brief in support of the Sacketts. The decision aligns with AGC’s brief, and the Justices acknowledge the need for clarity due to the severity of criminal sanctions under the Clean Water Act, a key issue that AGC raised. The Court roundly rejects the use of the flawed “significant nexus” test for determining when projects require a federal permit and establishes a new test for evaluating when a wetland is a waters of the United States (WOTUS).

Click here to read an analysis of the Sackett v. EPA decision.

Justice Samuel Alito’s majority opinion states that EPA’s “’significant nexus’ theory is particularly implausible” and that “EPA has no statutory basis to impose it.” This decision throws the Biden Administration’s new rule into question—as it heavily relies on significant nexus. It also bolsters AGC’s ongoing legal challenges to that rule, which have already halted its implementation in more than half the states.

The majority opinion outlined a test for determining when an adjacent wetland would fall under federal jurisdiction based on prior Supreme Court decisions. First, the water adjacent to the wetland has to be a WOTUS (i.e., a relatively permanent body of water connected to traditional interstate navigable waters). Secondly, “the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.”

Challenges Ahead

The federal agencies now have to determine how to apply the new test and figure out if any of the Biden Administration’s rule can still stand now that the “significant nexus” test is off the table. Currently, the Biden Administration’s rule is on hold in 27 states; however, the “significant nexus” test predates that rule. This means all projects in the U.S. are using the “significant nexus” test in some form to determine whether a federal water permit is needed. Contractors can expect some confusion in the short term. AGC will continue to challenge the rule and work to provide clarity for permitting decisions.

All justices decided in favor of the Sacketts, although the court was split on reasoning. Justice Alito wrote the majority opinion (5-4). No justices dissented.

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May 2023


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