Has Justice Kennedy tied EPA’s hands on WOTUS?

EPA is currently reconsidering the much-maligned Waters of the United States (or WOTUS) rule which defines the extent of the agency’s power under the Clean Water Act. This matters because the current rule significantly expands the federal government’s power to restrict private property rights and individual liberty, often in cases that have no environmental justification. On this issue, as with many environmental policy issues, moving the law in a libertarian direction would be better for both individual liberty and the environment

anthony_kennedy_official_scotus_portrait_cropSupporters of the current rule have indicated that they will challenge any more narrow rule as contrary to lower courts’ interpretations of a 2005 Supreme Court case, Rapanos v. United States. In that 5-4 case, the majority split between a 4 justice plurality opinion authored by the late Justice Scalia (announcing a clear, narrow rule) and a solo concurrence by Justice Kennedy (adopting a mushy test).

Without a clear rule to guide them, lower courts have had to wrestle with how to interpret these conflicting opinions. Most have decided that EPA can rely on the Kennedy test or either test to justify its regulatory authority. From this, supporters of the current rule have argued that EPA is tied to the Kennedy test and cannot easily disclaim it, as President Trump’s recent executive order recommends.

In a recent Legal Planet post, Professor Farber lays out three arguments that he thinks EPA could make to distance itself from the Kennedy test and why he thinks none of them are convincing.

Faced with this, the agencies have three options:

1. A different reading of Rapanos. They can argue that these courts are wrong about which of the Rapanos opinions is binding. But it seems unlikely those courts will agree, so the agencies would have to hope that Supreme Court would agree. This could become more likely if Kennedy is replaced by Trump.

2. Overruling Rapanos. They could argue that the Supreme Court should simply reconsider the meaning of the statute, siding with Scalia and instead of Kennedy. Again, this would rely on getting a more favorable Supreme Court bench.

3. Relying on Chevron Deference. Finally, they could argue that Kennedy was merely deferring to what was then agencies’s view rather than giving his own view of the statute. This is the only approach that doesn’t rely on a change at the Court.

Fortunately for WOTUS reformers, this analysis rests on a shaky premise—that the lower courts have held that EPA must regulate any water that satisfies Justice Kennedy’s mushy test. That misunderstands the dilemma those lower courts were trying to resolve. Here, for instance, is how the Eleventh Circuit described the problem.

The circuits likewise are split on the question of which Rapanos opinion provides the holding. Both the Seventh and the Ninth Circuits concluded that Justice Kennedy’s concurrence controls and adopted the “significant nexus” test. The First Circuit, on the other hand, concluded that because the dissenting Rapanos Justices would find jurisdiction under either Justice Scalia’s plurality test or Justice Kennedy’s “significant nexus” test, “‘the United States may elect to prove jurisdiction under either test.'”

In other words, these cases are trying to interpret what the Supreme Court left open after Rapanos—an extremely complex question due to the fractured majority. It’s clear that the Court has said that some EPA claims of authority go too far; Rapanos, after all, was a ruling against the agency’s broad theory at the time. The question remaining is how to define the uncertain outer limits in light of the case. Neither Rapanos nor the lower courts interpreting it were addressing the inner limit of the question, i.e. how narrowly EPA could interpret its authority consistent with the statute.

There are lots of good reasons to think that EPA could interpret its authority more narrowly than the Kennedy test—or even the Scalia test for that matter. For instance, it could begin by acknowledging that the Clean Water Act is a criminal statute. Under the sacrosanct rule of lenity, ambiguities in criminal statutes must be construed in favor of potential defendants, not in favor of the government. Thus, the Waters of the United States must be defined in a way that an ordinary person could recognize what is and isn’t covered, so that she can avoid committing a crime. Obviously the current interpretations don’t fit this requirement. If the Supreme Court and the lower courts (and reporters) can’t figure out what WOTUS means, how are ordinary people supposed to have a chance?

A narrower interpretation would also be more consistent with the statute’s stated commitment to federalism. Traditionally, the federal government has regulated navigable waters used in commerce while the states have regulated everything else. Broad assertions of authority under the Clean Water Act upend this regime without any clear guidance from Congress that it wished to do so.

A narrower interpretation could also be justified on policy grounds. It would be impossible for an agency with limited resources and staff to effectively enforce the statute if it covers every drop of water in the country and most of the dry land. So it would make sense to focus on those waters where federal oversight can have the greatest benefit. The current approach is a bizarro world in which the agency regularly complains that it lacks enough resources while also going after ordinary people for innocent activities on their private property—like threatening a Wyoming family with $20 million in fines for building an environmentally friendly pond for their horses or actually suing a farmer for a $2.8 million fine for plowing a field. If the agency is strapped for cash, perhaps it should stop wasting so much of it on enforcement actions that bring it nothing but ridicule.

As Professor Farber notes, EPA’s ability to adopt a substantially narrower interpretation of its authority may ultimately come down to Chevron deference. Professor Farber concludes that EPA likely couldn’t receive deference because, in his view, Kennedy’s test is an interpretation solely based on the statute rather than deference to the agency’s position in that case.

In rejecting Scalia’s insistence that wetlands have a surface water connection with streams. Justice Kennedy relied on evidence that even wetlands lacking such connection can have an impact on nearby water bodies, either due to pollution or because filling the wetland could result in silting. But he did seem to view the “significant nexus” test as part of the statute, not simply as one of many views that the agency might take.

This misreads Chevron, however. The critical question under Chevron is whether the statute is ambiguous. I don’t think anyone would say that the statute unambiguously means the Kennedy test. If it did, eight justices of the Supreme Court wouldn’t have disagreed with it, all of the lower courts wouldn’t have had so much trouble interpreting Rapanos, and this question wouldn’t remain hopelessly difficult more than 40 years after the Clean Water Act was enacted. In fact, not even Justice Kennedy appears to believe that the statute unambiguously means his test. During oral argument in last terms’ Hawkes case, he suggested that the statute may be so ambiguous that it is unconstitutionally vague.

If the Trump administration revises the WOTUS rule and it is challenged under this theory, one of the ironies is that it will put everyone, including judges, in an awkward position regarding Chevron deference. Those who are most skeptical of that doctrine will, one assumes, support the agency’s narrower interpretation of WOTUS. And those that are most likely to oppose a narrower interpretation support Chevron deference and are therefore committed to upholding the agency’s theory—whatever it is. One hopes that if there’s litigation over a revised WOTUS rule, the result will be to narrow both Chevron deference and EPA’s authority under the Clean Water Act. That would be a doubly whammy for individual liberty, reducing the power of unelected, unaccountable bureaucrats under this statute and many others.

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